How long can the housing market avoid a crash?

A potentially lethal combination of stagnant living standards and declining mortgage approvals is threatening to send the housing market into a precipitous slump ...

Bank of England data released yesterday suggests that the revival in property sales seen during the second half of last year has gone firmly into reverse, with every indication that prices will fall by next year, as lending remains so sluggish ...

The pressure on the banks will be increased in the coming months in any case as about £400bn in official support to them is due to be withdrawn, and banks will have to turn to wholesale money markets to support their lending. This may prove expensive ...

The European Central Bank will suck €142bn (£115bn) of its lending to the European banks on Thursday.

The extent of the squeeze on British living standards over the next few years was laid bare by the Hay consultancy group yesterday, who predicted that wage rises will fall badly behind inflation for the next four years.

With median salary growth forecast by Hay Group to reach just 2.4 per cent this year, and inflation rising to 5.3 per cent, according to the Retail Price Index, pay is falling in real terms for the average British worker for the first time in a decade.

... the hike in VAT to 20 per cent in January next year will ... Reductions in tax credits and thresholds, new higher rates of income tax for the better-off and increases in other taxes such as capital gains tax and insurance premium tax will [be an obvious hit to the spending power of family budgets].

The higher rate of CGT will make the returns from buy-to-let investing even less attractive ...

Independent  30 June 2010

Europe's banks prepare for a day of reckoning

House price surge stalled in June

House price inflation hits 8.5%

Landlord regulation proposals scrapped

Housing minister Grant Shapps says proposals to regulate landlords and letting agents would introduce 'too much red tape' ...

Speaking in parliament, housing minister Grant Shapps said he was rejecting the regulations proposed by the previous government following recommendations from the Rugg Review, a report into the private rented sector.

These included the establishment of a national register of landlords, regulation of letting and managing agents, and compulsory written tenancy agreements.

Shapps said: "With the vast majority of England's 3 million private tenants happy with the service they receive, I am satisfied that the current system strikes the right balance between the rights and responsibilities of tenants and landlords.

"So today I make a promise to good landlords across the country: the government has no plans to create any burdensome red tape and bureaucracy, so you are able to continue providing a service to your tenants." ...

Guardian  10 June 2010    Systemic Fiscal Reform

Letting agents 'let off the hook'

Homeownership – not renting – at heart of government housing strategy

Private landlord register confirmed

House price inflation hits 8.5%

House prices in England and Wales are continuing to rise strongly, according to the latest figures issued by the Land Registry.

Prices in April rose by another 0.2%, pushing up the annual rate of increase to 8.5%.

This was the fastest rate of growth since September 2007.

Meanwhile, the number of mortgage deals on offer has risen again to more than 2,000 as lenders continue the modest relaxation of their lending criteria.

The financial information service Moneyfacts said there were 2,191 deals available at the start of June, requiring down payments of between 0% and 40% of the value of the home being purchased.

That was a 14% increase in the number of mortgages in past month, although the proportion of them requiring at least a 25% deposit was steady at 56% ... The Land Registry said the cost of the average home in England and Wales now stood at £165,596.

Prices have been rising fastest in London over the past year.

They were up by 14.8% in the twelve months to April and put the capital's average house price at £341,487 after an increase of 1.6% in April alone ...

BBC NEWS  01 June 2010

House prices still rising

Buy-to-let mortgage rates signal market recovery

Confidence grows among lenders, despite budget predicitions of a fire sale of properties, with The Mortgage Works launching an 80% buy-to-let deal ...

inconsolable
15 May 2010, 9:11AM

The new govt. must do what Gordon Brown failed to do - stop the tax loophole which favours BTL landlords over honest young people and skews the housing market.

The BTL landlord can claim mortgage repayments as business expenses and avoid the 32.5% corporation/income tax. So, the more they have borrowed, the less tax they have to pay on earnings. Consequently, the BTL landlord can outbid the worker any time, and young people cannot get on the housing ladder.

It still sticks in my craw that a labour government did this.

Halo572
15 May 2010, 9:26AM

I think the best endorsement on this socially parasitic sector, and on Labour's handling of it, were the King and Queen of BTL thanking Gordon for his action on interest rates, being as it saved their empire.

A recovery will just indicate that it is business as usual as before 2008 and the bubble is being inflated again. Banker's bonuses and pay deals are already indicating that anyway.

Shame though that the rest of us will be forced to pay for this recovery through the nose for the next 20 years.

To be a socially useless parasite or not to be a socially useless parasite, that is the investment question?

Guardian  15 May 2010

Landlord refusing to do repairs

BNP can't count on Barking breakthrough

The free market dogma has never been explained to voters in this country, most of whom are unaware of the con that has been perpetrated on them It's very convenient, therefore, that immigration takes the flak whilst conventiently - for Davos Man - it does it's prime job: keeping wages depressed, and employed people in fear of the P45. People can vote for the BNP if they wish, but there's no road away from the global con by scapegoating migrants. They're just victims of the IMF and WTO, like the rest of us.

Nick Griffin has racialised housing issues but the area's problems aren't unique and BNP success can be rolled back ...

A key contest in this election is in Barking, between the BNP's Nick Griffin and Labour's Margaret Hodge.

On the face of it, all the ingredients for an electoral breakthrough by the BNP appear to be here: rising unemployment, housing problems, deep poverty, a growing proportion of immigrants and asylum seekers, and a local Labour party that has presided over decades of impoverishment.

The decline of industry in Barking and Dagenham, accelerated by Ford Dagenham's decision to cease car production in 2002, means the proportion of local people employed in manufacturing has fallen from 40% in the early 1990s to less than half that figure today.

Unemployment in the borough now stands at close to 10% and average incomes are the lowest in London. The borough has some of the lowest literacy and numeracy levels in the country and more than a third of its children are born into poverty ...

What is specific to Barking is the pace of change.

Its overall population, not just its proportion of ethnic minorities, is one of the fastest growing in the country.

This population competes for scarce resources. Council housing stock has fallen from 40,000 to 18,000 as a consequence of Margaret Thatcher's right-to-buy initiative in the 1980s, and the failure of Barking and Dagenham council to build any public housing for the past quarter of a century.

There are now more than 28,000 people on the local social housing waiting list ...

Guardian  16 April 2010    Global Labour Market    Inequality

At least 10% of new homes fail energy efficiency test

Since April 2008, all new homes have had to meet tough standards on draught proofing, lighting and heating.

All homes require an Energy Performance Certificate (EPC) indicating how they rate. But at least 30,000 of the 300,000 homes built since then do not meet these legal standards, according to official figures just released ...

According to the junior housing minister Ian Austin, 743 new homes – or 0.24% – built since April 2008 are rated in the top EPC band.

About 180,000 homes are rated in band B, and 89,000 are rated in band C.

New homes built must be at least a band C, with higher requirements for housing association and council homes.

The government figures do not divide private and public sector housing.

Experts are sceptical about the accuracy of these official figures.

Energy efficiency assessments are carried out by local government inspectors, or increasingly, poorly regulated private sector assessors hired by developers.

Local government inspectors said many private assessors do not want to apply the rules too strictly for fear of losing work.

Guardian  13 Apr 2010

Treasury saw buy-to-let threat to first-time buyers

The Treasury acknowledged privately as early as 2004 that a burgeoning buy-to-let market could be crowding out first-time buyers, according to a government report released by campaigners who lambast the authorities for allowing the landlord boom to continue regardless.

The admission from the Treasury under Gordon Brown's reign as chancellor runs counter to previous government rhetoric on the relationship – or lack thereof – between a rise in buy-to-let activity and a shortage of affordable homes for first-time buyers, according to the PricedOut group.

The campaigners received the Treasury briefing paper following a freedom of information request.

The report was drafted in response to a request by former prime minister Tony Blair in 2004 after he had read a newspaper article on the prospects of a housing market collapse.

In it, the Treasury concedes that the decline in first-time buyers (FTBs) taking out mortgages was a "notable feature of the housing market" with the proportion of loans to such buyers falling to an all-time low of 28% by the end of 2003, well below its post-1993 average of 46% ...

PricedOut argued that ... buy-to-let investment had created a net loss in the supply of houses available to first-time buyers and other owner-occupiers.

Guardian  12 Apr 2010

Buy-to-let tax break plan attacked

PricedOut

Half a million houses are lying empty

Charities are demanding an urgent rethink of government housing policy after a Guardian investigation found that almost half a million homes are lying empty in the UK – enough to put a roof over the heads of a quarter of the families on council house waiting lists.

The startling picture of neglect – we estimate that more than 450,000 properties have been empty for at least six months – at a time when there is an acute housing shortage was pieced together using information gathered from local councils under the Freedom of Information Act.

Our findings suggest the number of "long term vacant" properties is 25% higher than previously thought. David Ireland, chief executive of independent charity the Empty Homes Agency said the empty stock would go some way towards tackling the housing crisis – 1.8 million households are waiting for a council house – as opposed to the government's focus on building new homes to tackle the problem ...

Rics wants see VAT on home improvements reduced to 5% to make refurbishment of derelict properties more affordable. But Reynolds believes there also has to be a renewed effort to improve the regime to encourage owners to renovate their empty properties ...

Guardian  03 April 2010    Ministers pressed on empty homes

Lack of houses for sale triggers mounting demand

Homelessness

Housing

If you want cheaper housing, turn back the clock

The Financial Services Authority chairman said attempts to control Britain's febrile property sector by interest rates was futile.

Turner also doubted whether forcing banks to hold more capital during booms would do much to curb excessive lending. Instead, he suggested the clock should be turned back to the days when home loans would be less easily available.

The impact of such proposals, if implemented, would be profound. There would be no more 100% mortgages, let alone the 125% mortgages once offered by Northern Rock. Instead, anyone who wanted to buy a house would have to save for a deposit first.

House prices would fall.

In the UK of 2010 this all sounds like revolutionary stuff. But it was the norm for the first quarter of a century after the second world war, and in Germany or France such restrictions on credit would still be seen as prudential ...

There is plenty of evidence to suggest that precious capital has been misallocated in recent decades, to the detriment of Britain's industrial competitiveness.

Rising house prices simply transfer wealth from young people to their parents ...

Guardian  17 Mar 2010

60pc of renters are priced out of the market

Around 61pc of people who expect to live in a rented property for the coming year said they would like to buy a home but could not afford to do so, according to property website Rightmove.

Just 13pc of people who plan to rent said they were doing so out of choice, rather than necessity ...

Telegraph  18 Feb 2010 

Tenants given new right to post feedback on landlords on internet

The Government is planning to set up a new website, similar to travel website TripAdvisor, on which tenants can post their views on their landlord and their accommodation.

It also intends to set up a new housing hotline offering advice to tenants who are having problems with their landlord, which it hopes to have running this summer.

In a further move, plans were laid before Parliament today making it a legal requirement for all tenancies to have written agreements, to ensure that tenants are clear about their rights from the outset.

A new National Landlord Register is also being launched enabling tenants to see how well prospective landlords maintain their properties and how quickly they fix any faults with them. There will also be a tougher regulatory regime to drive out rogue letting agents ...

Telegraph  04 Feb 2010

The era in which all Britons aspire to own their own home may be coming to an end, according to the Housing minister, John Healey.

In a controversial speech, he suggested that Britain may be moving towards a European model, with renting on a roughly equal footing with buying.

He said home ownership had fallen from 71 per cent of households in 2003 to 68 per cent today, noting that this trend began in 2005, well before the recession.

"I'm not sure that's such a bad thing," he said.

Tenants Rights
itsthemechanic wrote:

Friday, 11 December 2009 at 03:48 am

Being European I have no problem with renting long term but in order for this to happen there needs to be an overhaul of tenant's rights in the UK.

Here in Germany, once you have a flat you are in a pretty safe spot. Your rent increases are limited by law, you can decorate as you wish and do in the flat what you like as long as you leave it in the condition you found it, and you are guaranteed 3 months notice to vacate the flat should the need arise.

As long as you pay your rent though, the landlord will need a very, very good reason to get you out (such as a demonstrable need for him or his immediate family to live there himself).

During the many years I spent in the UK, I have often found myself at the mercy of my landlords in ways that never allowed me to let my guard down and feel at home. Some of the nicer places wouldn't let you smoke, light candles or even put a nail into the wall to hang a picture. Some of the seedier ones would see the landlord ringing at all hours if the rent was a single day late, or throw you out on a whim if they were having a bad day or they didn't like your attitude.

I spent more time than I care to remember in squalid hostels and grotty flatshares because I simply didn't have an alternative, and came to appreciate the protected status a life-long tenant enjoys here in Germany. The UK needs to follow our example on this, if not everyone can afford to buy, then renting should be a viable alternative in the long term, and not a wild ride from one "short hold tenancy agreement" to the next.

Independent  11 Dec 2009

House prices predicted to fall in 2010

Buyers priced out of the UK housing market

UK house price gap continues to widen

Britons may be £1.45trn in debt but they are worth £9trn

£2,400: the bill every family will pay to cut the deficit

A leading Bank of England policymaker has called on the Government to raise taxes to prevent housing booms in the future.

Adam Posen, an independent member of the Bank's Monetary Policy Committee, said in a speech yesterday that the authorities should seek to limit house price bubbles because of the damage they inflict on the rest of the economy when they burst. He also suggested that property speculators and second home owners be subject to additional restraints.

Adam Posen, an American economist who joined the MPC this year, said: "Real estate bubbles tend to have much higher real economic costs than equity bubbles, perhaps because they involve illiquid collateral and local spillover effects."

Mr Posen suggested that real estate taxes, which include stamp duty and capital gains on properties apart from a main residential home, could be used as "automatic stabilisers" – rising during a boom but falling in a slump.

Mr Posen proposed: "Something modest, without any large implications for tax revenue over the cycle... It would mean having already existing title fees, capital gains taxes, stamp and transfer taxes, varying over time in line with price developments in the housing market more broadly, a simple blunt instrument targeted to lean against the wind in real estate prices in an automatic fashion."

Altering loan-to-value ratios and income multiple rules in the mortgage market could have a similar effect. Mr Posen added: "One could be more ambitious and complicate matters by taking into account second houses, speculative purchases, the amount of time owned before sale, and so on."

Independent  02 December 2009

UK house prices have risen for the seventh consecutive month, helped by better-than-expected news from the job market, the Nationwide has said.

The building society said that the average home increased in value by 0.5% in November compared with October and now costs £162,764.

The typical home was 2.7% more expensive than a year ago, at a similar level to prices in early 2006 ...

The number of mortgage deals on offer rose by 5% to 1,425 - the largest number since December last year.

The proportion of those requiring a deposit of between 0% and 15% of a property's value rose from 25% of the total at the start of November to 27% at the beginning of December.

And the proportion of deals needing a 20% downpayment rose from 9% to 11%.

But there was a fall in the proportion of mortgages needing a down payment of 25% or more. They fell from 66% of the total to 62% ...

BBC NEWS  01 December 2009

House prices up for fifth month in a row

More than 6,700 homes have been repossessed by banks in which the taxpayer has a major stake, as rising unemployment and pay cuts force homeowners to hand in their house keys.

An analysis of the six-month figures reported by the banks last week shows that the number of customers having difficulty with repayments has risen, although some lenders believe there are signs that the stress is beginning to ease among some borrowers.

At the end of June, Lloyds Banking Group - 43% controlled by the taxpayer and owner of the country's largest mortgage lender, Halifax - had the largest number of repossessed homes at around 3,000. Northern Rock, fully nationalised, had 2,522 on its books, while Royal Bank of Scotland, 70% taxpayer-owned, had 567. The latest data available for Bradford & Bingley is for the end of December 2008 when the figure stood at 643 ...

Mick McAteer, director of the Financial Inclusion Centre, warned policymakers against complacency. "The real damage is being done in the sub-prime market.

Last week's Treasury select committee report demands tougher action from regulators on aggressive behaviour of sub-prime lenders towards vulnerable consumers.

The CML's data does not fully capture the sub-prime market so is likely to underestimate the problems facing the most vulnerable households."

Observer 09 August 2009

Number of home owners falling behind with mortgage repayments rises

'Second wave' repossession threat

Talk that the housing market may be bottoming out after 18 months of falling prices may cheer the chattering classes of existing homeowners, but for young people it is no cause for celebration.

Jonny Scott, aged 24, from Winchester, says that one day he would like to buy a house or a flat but, despite a 20% drop in prices across the country, that still "seems millions of years away. I don't even see it as a possibility at the moment" ...

Research from the Chartered Institute of Housing out tomorrow will show that only a third of young people (18-to-24s) now aspire to own their own home. There has also been a big change in attitudes among the 25-to-34 age group; only 69% think home ownership is a good thing, down from 83% before the credit crunch struck.

CIH chief executive Sarah Webb says: "We've driven too many people into unsustainable owner-occupation and need to do a far better job of putting renting and owning on a level playing field. We need to get serious about the number of houses we are prepared to build and have to look at renting as a more attractive alternative to owning."

Evidence from the front line is that the stabilisation in the housing market is not driven by young people: the fall in prices so far has done little to help them gain a foothold on the housing ladder ...

Professor Steve Nickell, a former member of the Bank of England's monetary policy committee and now chairman of the National Housing Planning and Advice Unit, is puzzled that house prices seem to be bottoming out given that first-time buyer access to mortgages on reasonable terms is restricted by a still dysfunctional banking system ... (he) says that the long-running shortage of housing that the British property market suffers has not gone away just because prices have slumped.

"There is a shortage in the sense that not enough houses have been built to keep pace with the number of new households being formed," he adds. "And that has been the case since about 1998."

Britain's birth rate has been relatively strong, people are living longer and there is a steady flow of immigration, all of which puts upward pressure on demand.

Britain is estimated to need nearly a quarter of a million new homes a year just to keep up. This year, though, experts expect fewer than 100,000 to be built - the smallest number since the second world war - as a result of the market slump.

Nickell is worried that social housing waiting lists have risen to 700,000 households since the turn of the century:

"And it is continuing to rise very strongly. This is putting pressure on the private rented sector." ...

Lack of housebuilding means Britain looks destined to live with relatively high house prices lurching from boom to bust as they have done for decades ...

Observer 14 June 2009

Land Tax, Fair Tax

Thousands of developers' surplus new build homes in England are being rejected by housing associations as they are not of a high enough standard.

It is estimated there could be as many as 100,000 unsold new-build homes in the UK.

With about 4.5m people on housing waiting lists, the government has set up the Clearing House Fund to help housing associations in England buy some of the surplus housing stock that private developers fail to sell.

Associations across England have already used the fund to buy about 5,000 homes and have funding to buy the same again.

Gavin Smart, of the National Housing Federation said: "It's very hard to put a number on homes we are rejecting.

"But it would be a significant proportion because private developers simply do not have to build to the same standards as housing associations.

"Many of the homes that we are being offered would not meet those standards and quite sensibly housing associations looking at those homes are saying they are not of a suitable quality for them to purchase."

Multiple flaws

Independent building inspector Steve Nancarrow told the BBC he had found 90 flaws in just one new-build flat valued at £210,000.

Faulty electrics, no hot water, and leaking windows are just some of the problems he discovered.

"It's my job every day to go around people's houses and look at the quality of the units, and it's getting worse and worse.

"They are fobbing them off with rubbish," he said ...

BBC NEWS 16 May 2009

The number of homes repossessed in the UK rose to 12,800 in the first three months of the year, the Council of Mortgage Lenders (CML) has said.

This was up 23% from the 10,400 in the previous three months and 50% up on the 8,500 in the same period last year ...

The number of home loans with arrears of more than 2.5% of the mortgage balance rose by 12% from 182,600 in the fourth quarter of 2008 to 205,300 in the first three months of this year, the CML said.

This was 62% up on the 127,000 in the first quarter of 2008.

Other key issues revealed:

• There was a jump in the number of buy-to-let investors having properties repossessed in the first quarter of the year
• Fewer people faced the early stages of repossession as lenders held back from going to court
• New schemes were aimed at offering alternatives to repossession
• The figures were described as "pretty ugly" by Chris Tapp, director of debt charity Credit Action ...

BBC NEWS 15 May 2009

Repossessions are creating housing crisis

Millions of people have been condemned to live under "social apartheid" by 30 years of poor housing policies, a damning report on council estates will say this week.

The 107-page report, to be published on Friday, condemns successive governments for pushing poorer people into what it condemns as "social concentration camps" set away from private housing, jobs and shops.

Children born on such estates are more likely to end up unemployed, suffer mental health problems and die younger than their counterparts in private housing, says the study by the Fabian Society. Most damningly for the Government, it concludes that pledges by the then Prime Minister Tony Blair to end "no-go areas" and close of the gap between rich and poor have ended in failure.

The report, entitled In the Mix, finds that by concentrating council housing in estates set apart from the wider community, successive governments have produced a situation where living in social housing is not just a sign of poverty but a cause in itself.

It is blunt in assessing Britain's housing policy as "nothing short of disastrous" ...

The gulf between those left stranded on these estates and rich or even middle-income families is wider now than it was 30 years ago. In England and Wales, the average electoral ward is 16 per cent public housing, but in the poorest wards that figure rises to 70 per cent or more.

By splitting up those living in public and private housing, successive governments have fostered suspicion towards those who live on council estates. Research for the study found that a third of those polled felt people living on council estates had "nothing in common with them", and 60 per cent of those believed that mixed housing would be a bad idea.

It concludes that segregated estates have had a devastating effect on social mobility. "There is nothing inevitable about this correlation between housing and disadvantage. It has been caused by political and institutional processes – and such processes can be arrested and altered."

The Independent 03 May 2009

A government scheme to help families avoid losing their home has helped just one household since it was launched in January, figures showed today.

The £200m mortgage rescue scheme aims to prevent vulnerable people having their home repossessed, by selling all or part of their property to a registered social landlord. The government claimed it would help 6,000 people over a two-year period.

But figures have shown that despite 452 households applying to take part in the scheme from January to March, only one household has so far been helped by it.

Liberal Democrat shadow housing minister, Sarah Teather, said: "Tens of thousands of families will face the misery of repossession and homelessness this year, but the government's scheme has helped just one household.

"This is an appalling failure by a government that is more interested in headline-grabbing than in helping families through the economic crisis."

The figures showed that a total of 1,104 households approached local authorities about mortgage difficulties during March, of which 407 were deemed to be in a priority need category because they had young children or were elderly or infirm.

Guardian 30 April 2009

Government rolls out mortgage rescue scheme

Trying to meet the desire by most people to own their own home "has been a disaster" for UK housing policy, a Guardian conference was told today.

The chief executive of the National Housing Federation, David Orr, said the aspiration for home ownership should no longer drive policy.

"We have used it as the policy determinant and that's absolutely wrong," he told the SocietyGuardian housing conference in London.

Orr said government policy could no longer be "seduced by the monochrome conversation that says 'owning good, renting bad'" ...

Guardian 29 January 2009

Brown promises extra help for social housing

New plan to revive social house building

National Housing Federation

Northern Rock

GORDON BROWN is preparing to sweep aside planning controls in villages and market towns to allow the biggest rural housebuilding programme for a generation.

Local authorities are to be controversially ordered to adopt a relaxed approach to the building of new homes in areas where planning permission has traditionally been refused.

The government has concluded that protecting the environment should no longer be the overriding consideration when decisions are made about whether to allow development in areas where locals are struggling to afford homes.

Under reforms expected to be unveiled this month, councils will be told to:

¤ earmark new building sites in every village and hamlet where affordable housing is needed
¤ use sweeping powers to overrule normal planning curbs in protected areas
¤ provide incentives for farmers to sell land to developers
¤ create a generation of new communities on the outskirts of market towns, similar to Poundbury, the Prince of Wales’s “model village”.

The changes are aimed at helping the government to achieve its target of building 3m new homes by 2020 ...

Sunday Times 04 January 2009   Local Government      

Government action is needed to free up more than 750,000 empty houses for homeless people, the Royal Institution of Chartered Surveyors has said.

England has 1.7 million on housing waiting lists, the Local Government Association says. About 72,000 are homeless or in temporary accommodation.

The surveyors' body wants VAT cut from 15% to 5% on building work to encourage landlords to rent out housing. ...

The Royal Institution (Rics) said there were about 762,635 properties in England not being used.

It said that while the government had announced a raft of measures to help homeowners avoid having their properties repossessed, little was being done to help the homeless. ...

BBC NEWS 22 December 2008

100,000 homes empty in London

Nearly 300,000 empty houses in England

Use empty houses, Gordon Brown told

Councils could seize empty homes

Waiting lists for affordable housing have risen by two-thirds in the past five years in areas of England popular with second homeowners, figures show today.

Housing waiting lists increased by an average of 66 per cent between 2002 and 2007 in the top 10 areas of England for second homeownership, according to the National Housing Federation. The group said nearly 240,000 properties in England were registered as second homes, but demand for property from people outside some regions had pushed prices to unaffordable levels for locals.

The number of people on waiting lists for affordable housing increased by 115 per cent in the City of London, where a quarter of properties are owned by someone who does not live there full-time. The majority of areas affected are rural. Waiting lists for example rose more than 80 per cent in North Cornwall and South Lakeland in the Lake District.

The federation's chief executive David Orr said: "People have every right to buy a second home. But we must recognise that, in many cases, this has priced out local people."

The Independent 05 November 2008

Tighter regulation is needed of firms offering sale and rent back deals to struggling homeowners, according to the Office of Fair Trading (OFT).

Under these deals, people struggling to pay their mortgage sell their home at a discount to firms who let them stay on in the property as tenants.

But an OFT report found that this was not the best option for some, and others were quickly evicted.

It wants the estimated 1,000-plus firms involved to be more transparent.

An unknown number of amateur landlords are also involved in the relatively new industry.

The OFT said that about 50,000 transactions of this kind have already taken place ...

BBC NEWS 14 October 2008   

The number of people on waiting lists for affordable housing in rural areas has soared by more than a third during the past five years, figures have shown.

Nearly 700,000 people in the countryside are currently waiting for an affordable home, 37% more than in 2003, according to the National Housing Federation and the Campaign to Protect Rural England (CPRE).

At the same time the proportion of homeless households in rural areas has more than doubled during the past five years, from 16% of the national total in 2003 to 37% now.

The groups warned that with the younger generations priced out of the market in many rural areas, communities faced an uncertain future unless action was taken to address the lack of affordable housing. ...

Channel 4 - News 29 Sep 2008

Five million people will be on waiting lists for social housing by 2010 because of problems in the property market, council leaders warned today.

The Local Government Association issued its prediction following the release of figures showing that there were 18,900 mortgage repossessions in the first half this year - 48% more than in the first half of 2007. ...

Guardian 08 August 2008

Centre for Housing Policy

Centrepoint

Crisis

Shelter

The Government's response to the floods has been criticised as it prepares to give the go-ahead for hundreds of thousands of new homes to be built in areas at risk of flooding.

A Green Paper on housing to be published today will say it is not realistic to prevent building in places likely to be hit by floods because 10 per cent of England's housing and population is already in "at risk" areas. But it will call on local authorities to take account of the increased flood risk caused by the changing climate.

The document will spell out how the Government intends to meet Gordon Brown's pledge for another three million homes by 2020. About £8bn of taxpayers' money will be spent on providing 70,000 affordable new homes each year, mostly for rent from councils or housing associations.

There will be cash rewards for local authorities which provide more homes and penalties for those which fail to identify sites for housebuilding. ...

The Independent 23 July 2007

An acute shortage of houses is driving the boom in the property market while at the same time developers are being forced to build a "tidal wave" of new flats which they are struggling to sell.

The latest Government figures show that the price of a family house has risen at eight times the rate of a new flat since 2000. ...

Since 2000, when the Deputy Prime Minister introduced controversial planning regulations, the number of detached, semi-detached or terrace homes being built has fallen, with 21,000 fewer built last year than in 2000, according to the National House Building Council.

This shortage has caused the cost of a detached house to double to £313,000 while the price of a new flat has climbed just 11 per cent to £188,000, according to statistics from the Land Registry. ...

Roger Humber, of the House Builders Association, said: "When politicians try to rig the market they eventually corrupt the market. It's the outward workings of Prescottian economics, as I call it."

He said that in Manchester alone there were 20,000 flats awaiting planning permission against "just a handful" of new houses. "It's across the country - a tidal wave of new flats waiting to come on to the system. They can never possibly hope to sell them all," he said. ...

Telegraph.co.uk 29 May 2007

Barking & Dagenham has recently become synonymous with the British National Party. The borough has hardly been out of the news. For two weeks before the local elections the media were crawling over the area writing articles foreboding BNP support. When this became a reality on 4 May the media were back in town, this time reflecting on the political earthquake that was largely of their own making. Jon Cruddas MP and Nick Lowles argue that only a readjustment in public policy can defeat the BNP. ...

The real trigger for BNP activity, and consequently votes and elected councillors, was the media frenzy following Margaret Hodge’s comments that eight out of ten of her white working-class voters supported the BNP, her view that in some sense the profile of Barking resembled that of Brixton and the statement that other London authorities were actively depositing asylum seekers into the borough. What followed was arguably the most sustained, and indeed often benign, media coverage of the BNP that we have seen. ...

The key driver of this transformation is the relatively low cost private housing market; yet this consequence of the right to buy has also heightened demand for social housing given sustained house price inflation over the past five years. The borough retains the lowest cost housing across the whole of London and as such it has a magnetic pull for anyone in search of such housing. ...

The major demographic changes are still off the radar of public policy makers who remain attached to census data that offer diminishing returns in terms of understanding the day-to-day realities of life in the borough. The population changes have largely occurred since the last census. Yet public policy making assumes a stable – indeed slightly declining – population of 164,000 for allocating resources with a static ethnic make-up for every year since 2001.

The only data set that begins to uncover the demographic shifts of which every resident is aware is year-on-year data regarding school rolls. This shows up both a rapidly growing head count and dramatic shifts within that total. For example, between 2003 and 2005 the percentage of white children on the school roll fell by some 9.1%. Three quarters of this change is accounted for by black African children.

One of the key factors behind the emergence of the BNP is this rupture between the formal state perception of the borough and the day-to-day dynamics at work within it. The incremental state investment in public services on the basis of out of date population statistics cannot even begin to remove concerns that demographic change is occurring while resources are becoming more scarce. Therefore, it is a short step to perceive that these changes are actually reducing the social wage, be this in terms of growing health inequalities, reduced access to social housing or even declining hourly wage rates as the dynamic of migration triggers a rush to the bottom in terms of conditions at work. ...

Searchlight June 2006

The number of homes available to rent from local authorities has been cut dramatically. More than 1.5m homes have been sold off since the Conservative government introduced "right to buy" legislation in the 1980s. At the same time, there has been a big increase in the number of households, thanks largely to the growth in people living alone. Soaring prices have also locked many of them out of the housing market. Housing associations have struggled to keep pace with demand.

...

The Treasury-sponsored Barker report said in 2004 that Britain needs to build 140,000 new homes a year - of which 23,000 should be social housing units - if housing supply is to meet demand. The Lib Dems say there are 1.6m families on waiting lists for social housing - compared to 1m in 1997. ...

BBC NEWS 25 May 2007

Education Secretary Alan Johnson has added his voice to attacks on trade minister Margaret Hodge over comments she made on housing allocation.

Mr Johnson accused her of "using the language of the BNP" after she said British families had a "legitimate sense of entitlement" over immigrants.

Jon Cruddas and Peter Hain, who like Mr Johnson are Labour deputy leadership hopefuls, have also attacked Mrs Hodge. She has said she was simply reflecting the concerns of her constituents.

Mrs Hodge's Barking constituency, in East London, has been hit by a severe housing shortage, with the council house waiting list standing at more than 8,000 families. ...

Mrs Hodge's critics say she is wrong to suggest immigration is to blame for housing shortages, saying "only 1%" of social housing was occupied by foreign nationals. ...

BBC NEWS 25 May 2007

The true size of the housing market boom was demonstrated yesterday by figures that showed people are borrowing an average of almost 6.5 times their salary to buy a home.

This indicates how much families are extending themselves to buy property after the biggest housing boom in history. It will spark fears that prices could soon take a tumble, as they pass beyond what most people can afford.

Banks and building societies said the average amount loaned to people buying a home has soared to £146,900. The figure has jumped by 12 per cent in the past year — almost three times the increase in wages. ...

Telegraph.co.uk 30 December 2006

Spin doctors in Ruth Kelly’s department for communities and local government went into overdrive last week to suggest that a report by Professor John Hills would back their plans for an attack on the principles of council housing.

The report would abolish the right to a lifelong secure council tenancy, they suggested. It would introduce means testing to force better-off council tenants out of the public sector, they hinted. But they were disappointed.

"If you came with the impression that I was going to be recommending the ending of security of tenure, or that tenants if they’re lucky enough to improve their circumstances will be thrown out of their homes, then you’re going to be disappointed," Hills said at the report’s launch.

Austin Mitchell MP, chair of the House of Commons’ council housing group, commented that the Hills report amounted to "an endorsement of the principles behind council housing" – in particular that social housing should be decent, affordable and secure.

Big build

But he added, "What John Hills missed out was the need for the big build – to provide council housing for those who either can’t afford or don’t want to get on the home ownership escalator."

Alan Walter, chair of Defend Council Housing (DCH), said that the frantic spin from the government reflected its difficulties.

"They have been trying to get rid of council housing by privatisation," he said.

"Now that they’re losing tenants’ ballots around the country, they’re flying a kite to see whether they can regulate or legislate to take away our secure lifelong tenancies."

Though the Hills report failed to live up to the government’s hopes, Alan noted that it does talk about offering "alternatives" to council housing.

This formulation could be used by the government to push through some of its neoliberal proposals anyhow.

DCH remains opposed to such moves, says Alan. "Restricting access to council housing to only the poorest creates distorted and transient communities.

"It denies council tenants the right to a home – as opposed to somewhere just to temporarily lay our heads down for the night."

Socialist Worker

For Thatcher home-ownership embodied all the vigorous Tory virtues: secure saving, family values, household gods, a lifetime of hard work rewarded. ... She was adamant that the state should use its resources to help people own their houses.

This form this took was tax relief on mortgage interest payments.

Despite annual pleading from the Treasury, she regarded 'middle class subsidies' as a fit compensation for years of taxes spent on the undeserving poor. ... It was her sort of social engineering.

The cost of mortgage interest tax relief ... increased by 200 per cent in real terms between 1980 and 1990, to stand at £7 billion. ...

Needless to say local councils and their tenants enjoyed no such indulgence. ...

When ordering councils to sell houses, built partly with local money, she felt she should ... leave the receipts with the locality ... But [she] had no desire to leave local authorities to disperse [it]. ... She was determined to impose her own view of how the nation's housing stock should be financed an allocated.

... Most council anger was directed at Thatcher's insistence on discounts of up to 60 per cent ... Sales raised £18 billion during the 1980s ... [but] ... The cost of discounting was estimated at 32 billion overall.

For its part the Treasury could not bear to see such money pouring into council coffers. Lawson used his powers to restrict the right-to-buy revenue for investment ... He was determined to treat the money as his own ... in 1987 he boasted a £1 billion undershoot in ... public borrowing [but] did not mention that it reflected a surge of £2 billion that year in right-to-buy receipts. ...

While council houses were being sold, they were not being built.

In the 1970s, local councils built or restored 200,000 units a year. By the end of the 1980s the total was down to 13,000 and falling. A chapter in the history of civic Britain was ending.

Charitable housing association had long complemented local housing departments, usually more efficiently. Thatcher duly heaped praises on them.

Housing associations received 90 per cent of their money direct from central government through a quango, the Housing Corporation. This body could now do no wrong.

In 1979 the corporation had 100 staff and a budget of £50 million. When Thatcher let it had 700 staff and a budget of £1 billion. It was sponsoring the construction of three times as many houses as were local councils. ...

[Thatcher's] response to the poor image of inner-city housing was a burst of ad hoc initiatives which came to characterize all Whitehall intervention in this area of the welfare state. The late 1980s saw Housing Action Trusts, Community Housing trusts, Urban Housing Renewal Units, and Priority Estate Projects.

Under Major and Blair the pace of such intervention quickened, except that the names were of the 1990s: Estate Action, Rough Sleeper, Tenant Choice.

Extracts from Simon Jenkins:

Thatcher & Sons | Penguin Allen Lane 2006

Shirley Porter scandal

Summary of UK property market

Since 1970 the average house in the UK has increased by more than 35 times, from an average price of £4,874 in 1970, to £172,788 in 2004.

The biggest winners since 1970 have been homeowners in London who have seen the value of their homes increase by over 40 times. The next largest increase has been seen in the South West region with house prices increasing by 40 times

Homeowners in Scotland have seen the smallest rate of growth in the UK. House prices have risen by 23 times during the past 35 years.

Homeowners have seen the greatest annual real rate of increase in house prices under Ted Heath’s Conservative Government between 1970 and 1974. During his term in office, house prices in the UK rose by an average of over 13% per year in real terms (i.e. after adjusting for retail price inflation). Coming a close second has been Tony Blair’s current Government where the real annual increase in house prices since 1997 has been just over 10%. (See Table 2)

Homeowners saw the slowest annual real rate of increase in house prices under Harold Wilson’s Labour Government. Annual house prices actually fell in real terms by 13% between March 1974 and April 1976.

Home ownership has risen from 45% in 1964 to its current level of 70%

britsandmortar.com

According to the retail price index £4874 in 1971 (*) would have been worth £44,872 in 2004. That's an increase of approx 9 times, against approx 35 times for housing.

From 2004 to January 2007, average house prices have gone from £172,788 to £205,286, an increase of £32,498, or 18 per cent.

In Boom Bust, I trace land values over four centuries. They move in 18-year cycles, identifying a clear pattern of turning points in the economy. Embedded in this process is a 14-year house-building cycle, terminating in feverish land speculation. During the last two years of the construction cycle people recklessly expose themselves to the Winner's Curse.

In the land market, a rise in demand cannot result in an offsetting increase in supply in places where people want to live and work. So prices are driven to dizzying heights by speculators, who outbid each other with offers for tracts that cannot yield an economic return. The market stalls and the house of cards comes crashing down.

The timetable is dictated by a financial mechanism, at the heart of which is the rate of interest on mortgages. From 1714, this was pegged by the markets at 5 per cent. Today, the MPC is contemplating raising its rate of 4.75 per cent in response to inflationary pressures. The return of the rate to 5 per cent will mark the final phase of the property cycle. Many house buyers who think they are about to pull off great deals this Easter will pay a heavy price in the recession of 2010.

Observer 27 March 2005