September News – house prices
House price growth slows
The latest figures from Halifax reveal that the rise in house prices slowed in August from the annual price growth of 10.2% recorded in July, with prices in the three months to August standing 9.7%, still higher than in the same period a year ago. Although this could be in response to there are some signs of an improvement in housing supply, both in terms of more second-hand properties coming onto the market and increased numbers of new homes. These trends should help to improve the balance between supply and demand, contributing to an easing in the pace of house price growth. The average price of a house rose 0.1% in August compared to July to £186,270. Mark Harris, of SPF Private Clients, said the combination of more property coming up for sale and the likelihood of an interest rate rise at some point in the coming months was applying the brakes to the “runaway” market. Although Francis Maude, minister for the Cabinet Office, has said that the housing shortage has been worsened by the government itself, claiming that many government departments did not even know what property was on their books until recently.
3 million could be at risk of losing their homes
Analysis of government data by the University of St Andrews suggests that more than 3 million households are at risk of losing their homes if they suffered just a small drop in their income. The researchers found that some 625,000 of these households have already missed at least one essential household bill payment, such as a fuel demand. Elsewhere, a survey from Nutmeg, the investment firm, suggests that nearly 2 million homeowners would not be able to afford mortgage repayments following a base rate rise of 2%. A third of the 4,000 homeowners polled said they wouldn’t be able to afford their mortgage if rates rose to 5.5%.
Lord Rogers hits out at city extension proposal
Lord Rogers of Riverside has attacked the Wolfson economic prize winning proposal to build up to 40 new garden cities in the green belt as “a ridiculous concept” and has called instead for the developments to be stitched into existing cities using derelict, or brown field sites. The Labour peer said he was saddened by the re-emergence of ideas to build several million new homes on greenfield sites and proposed instead to build major developments around Croydon in south London and northern cities such as Manchester and Hull. But the winner of the Wolfson prize, David Rudlin, said that while cities such as Manchester, Leeds, Sheffield and Birmingham did have plenty of previously used land, other centres such as Oxford, York, Chester, Durham and Reading did not and could suffer without expansion on to green belt. Brandon Lewis, the housing minister, said Mr Rudlin’s plan was “not government policy and will not be taken up”. “We are committed to protecting the green belt from development as an important protection against urban sprawl,” he said.
Call for tax raising powers for cities
A new report is to suggest that English city-regions are given new tax-raising powers. Ed Cox, director of think-tank IPPR North, is to warn that English citizens are concerned that Scotland is getting the “lion’s share of attention and public finance”. In a report set to be released on Friday, the IPPR will argue that English “combined authorities” should have control over business rates and property taxes such as stamp duty. They should also be given a share of income tax.