ROOF Blog archive

The government is likely to break its promise to build 70,000 affordable homes a year by 2010-11 according to its own figures. A Guardian analysis of this week’s pledge to build more affordable housing indicates that the government will miss its target by at least 13,550 a year; while only 13,450 of the 56,500 new homes built a year will be council housing, down from 45,000 out of the original 70,000 planned. Figures also show that despite the government building fewer homes the programme will cost more money.

A Campaign to Protect Rural England study has accused developers of concreting over greenfield land, rather than build on brownfield sites, because the land is easier to build on and the houses can be sold for more. The CPRE wants tighter restrictions on the scale, location and timing of greenfield land release and more incentives for developers to build on brownfield land first.

The Confederation of Business Industry has said that delays in the planning system are discouraging major investment in renewable energy. It said little progress has been made in quickening up the planning process and that business was being prevented from investing in the new low-carbon technology. It wants the government to publish national policy statements to boost investor confidence.

Meanwhile, the financial incentives given to councils to speed up housing planning applications to meet the 13-week target has had some ‘perverse’ consequences, a parliamentary committee has found. The MPs found that while the incentives have helped double the number of developments, they have had a number of unforeseen side effects such as a greater proportion of rejections. 

The Financial Services Authority has warned a number of insurers have recently increased the premium charged for mortgage payment protection insurance or reduced the level of protection offered, at a time of rising unemployment. The City watchdog said some insurers have increased premiums by between 30 and 50 per cent, while others have cut the maximum monthly payout and increased the waiting period before people can claim from 60 to 90 days.

A Salvation Army report has warned a generation of young people are binge drinking to such an extent they are at risk of social exclusion and homelessness. The report, Seeds of Exclusion 2009, says it is concerned for a new generation of young homeless adults who appear to be self-medicating with drugs and alcohol. Relationship breakdown and lack of supportive relationships are cited as the main reasons for homelessness. However, the research indicated that 59 per cent of those questioned reported an alcohol addiction, rising to 66 per cent among the 18- to 25-year-olds.

The government has announced that financial support to students will be frozen next year because of ‘difficult economic times’. The decision has been described as a ‘kick in the teeth’ for young people who argue the cap in grants and loans represented a real term cut and would increase student debt level.

The long-term regeneration legacy of the 2012 Olympic Park in London has been called into question by the London Assembly’s economic development committee. In a progress report the committee concluded that without a ‘credible anchor tenant’ for the stadium, the creation of 10,000 new homes in the community, several schools and many jobs was just ‘aspirational’ and benefits may not appear for ‘many, many years’ after 2012.

The number of young people not in employment, education and training (neets) is expected to total one million by September research by the Local Government Association has found. Much earlier intervention is needed to identify young people who are at risk of dropping out and councils should be allowed to fund employment or training projects, the LGA says.

The rising cost of fuel, food and public transport has hit the poor hardest. The Joseph Rowntree Foundation calculates that the cost of living for those on a minimum household budget is rising faster than inflation. The costs for a single household on a low-income budget were up 5.3 per cent this year, followed by 5 per cent up for pensioners and couples with children.

John Healey has announced plans to set up a new central team to fast track urgent home repossession cases from next month. He defended the government’s effort to help struggling homeowners saying it has put into place help ‘at every step of the way’ and to ensure that lenders can only repossess homes as a last resort. More than a thousand households a month were being helped under the mortgage rescue scheme, the minister said.

However, consumer groups and charities including Shelter have been speaking before a Treasury select committee looking at how mortgage lenders handle repossession cases. They have called the government schemes ineffective and accused the Financial Services Authority of being too slow in penalising lenders who are guilty of bad practice, and of failing to name and shame culprits. They said that lenders were also failing to disclose enough information on how they manage arrears cases. Kay Boycott, a Shelter spokesperson said that as many as 120,000 people could lose their homes by 2011 in a ‘second wave’ of repossessions.

The government is in talks with property developers about the introduction of a local authority backed bond scheme aimed to finance stalled regeneration projects. Under the proposals a bond would be underwritten by the government and sold to investors. The borrowed money would be used to pay for basic infrastructure on mothballed sites which will allow building work to begin. Local councils and MPs have also backed the demand following a parliamentary inquiry.

The Homes and Communities Agency says it is ready to begin delivering the significantly enlarged programme of public house building when it takes responsibility of the additional £1.5 billion promised on Monday by Gordon Brown. The HCA will allocate the funds through its National Affordable Housing Programme, and via the existing bidding process which it says will kickstart stalled schemes and help local authorities directly.

The Conservatives have warned that equality legislation could stop government plans to give local people greater priority for council housing. Shadow housing minister Grant Shapps said the measures would be illegal and questioned if funding for the £1.5 billion cost of the programme would be diverted from the Decent Homes initiative, which aims to take every council and social property in the country to a decent standard. The government has denied this.

More help to improve household’s energy efficiency will be made available as the government increases its carbon emissions reduction target scheme and introduces a new community energy saving programme. The schemes will take the energy efficiency improvement budget to £3.5 billion by the end of 2012.

The House of Lords has ruled that women staying in temporary refuges after fleeing domestic violence will be considered homeless and have the right to be found a permanent home. Shelter fought the case of a mother of two children who stayed in a refuge after fleeing a domestic violence situation whose application to be homeless was refused, because she was seen to be ‘adequately housed’. The ruling overturns the present situation where only women who register with a local authority are deemed homeless.

Details of Gordon Brown’s plan to boost social housing were revealed in the House of Commons yesterday. He announced he would pump £2.1 billion into building affordable housing, including an extra 20,000 homes to be built in the next two years on top of the 90,000 already in the pipeline. He said he would triple the £600 million announced in the Budget to cover new council and housing association homes – with half the extra £1.5 billion coming from the Communities and Local Government budget and the other half redirected from other government departments including transport, health and schools.

John Healey is expected to announce details of a consultation to allow councils to keep the proceeds of council house sales and the revenue from rent, after revealing last night that he would ‘dismantle’ the current council housing finance system. Under the current system the money is returned to the Treasury where it is reallocated to local authorities based on housing need.

A two-year investigation by the Equality and Human Rights Commission and the Local Government Association, whose conclusions will be released next week, has found that immigrants were not jumping to the front of queues for public services, although the belief was widespread. The majority of new migrants (60 per cent) tended to end up in private rented accommodation because they were not eligible for council accommodation, another 18 per cent bought their own home and only 11 per cent were in council properties, compared with 17 per cent among the general population.

A 0.9 per cent increase in house prices in June has fuelled hopes that the property market it stabilising. Figures from Nationwide Building Society show that the average house price has increased just below one per cent for the month in June, and by the same amount in the three months to June, compared to a 0.4 per cent fall in the quarter to May. The annual rate of decline stands at 9.3 per cent, down from 11.3 per cent in May.

And in further news, the Bank of England has said there were a total of 43,414 mortgages approved in May, up from 43,191 in April, but down on the expected figure of around 46,000. Mortgage landing in May rose by just £324 million, a third of the level in April and a tenth the amount loaned at the same time a year ago. It was the weakest increase since records began in April 1993.

Figures from the Office for National Statistics show the UK economy shrank by 2.44 per cent in the first quarter of 2009 – the fastest rate in more than 50 years, and much worse than expected. Gross domestic product has fallen 4.9 per cent in year on year figures – the largest drop on record.

In related news the Organisation for Economic Cooperation and Development has told the government to cut its budget deficit by a larger amount than it currently intends, or it will face major problems in the coming years. The OECD said that Britain’s deficit would climb to 90 per cent of economic output – much higher than the 80 per cent projected by the Treasury in the Budget – and in order to maintain the economy the government should target ‘more ambitious’ budget cut backs, rather than raising tax.

The latest figures of those homeowners approaching the mortgage rescue scheme for help in paying mortgages have been released today. A further four households have been accepted, bringing the total to six which have benefited, but the number approaching the local authorities for help has remained steady.

Energy efficiency and environmental standards are becoming an important factor for buyers of new-built homes, a survey for New Homes Marketing Board has found. The ‘green factor’ is now one of the top three criteria for people buying a new house, overtaking traditional benefits such as location and value for money. Top of the list is the provision of a garden or outside space at 51 per cent, followed by a garage or private off-street parking at 47 per cent.

Squatters have taken over the home of married Labour MPs Ann and Alan Keen, who have recently come under fire for claiming hundreds of thousands of pounds in expenses on a second home located a few miles away. The squatters said they moved in after a neighbour said the house had been empty for more than a year, and say they have the support of local residents. The BBC say they have obtained a letter from the local council telling the couple that ‘urgent action’ is required from them to explain why their main house is unoccupied.

Gordon Brown is expected to announce a proposal that will require councils to take account of applicants’ connections to the area when allocating homes, as part of a multi-million pound plan to build more affordable homes. The prime minister hopes the move will increase stock in both council housing and affordable private homes in the coming two years, while creating thousands of new jobs in the process. Funds will be made available to the HomeBuy Direct scheme which helps first-time buyers into the market, while councils will be given discretion to provide social housing to local people even if they are not considered priority cases.

Shelter has warned the government and mortgage lenders to start preparing for a second wave of arrears and repossessions that will hit the UK in the next two years. It says hundreds of thousands of homeowners face being repossessed or falling into arrears as the effects of rising unemployment, higher interest rates and mortgage support schemes ending start to take effect. Shelter has seen a 250 per cent increase in the number of calls to the helpline regarding mortgage arrears in the past year.

House prices remained steady in June for the second month in a row, while demand from potential buyers outstripped the supply of homes on the market, analysis from Hometrack has found. The average cost of a property remained at £155,600 for the past two months, while the average rate at which house prices are declining in year on year figures has slowed, down 8.7 per cent in June from 9.6 per cent in May. Hometrack said that rising sales, a dwindling supply of homes on the market and increasing demand were ‘underpinning’ prices at the current level.

Mental health charities warn that banks provide little support for customers with mental health issues, and in some cases exacerbate their conditions by treating debtors insensitively and selling them unsuitable products. A government thinktank Foresight suggests that debt collection agencies often ‘deliberately produce fear, anxiety and mental stress’ for debtors, and creditors needed to make stricter assessments to determine which borrowers are in a position to meet their financial obligations.

Meanwhile, debt charities have attacked high street banks for repossessing homes to recover credit card debts of just several thousand pounds. Citizens Advice has warned borrowers struggling to repay credit cards or personal loans they are at risk of losing their homes because lenders are increasing securing debts against a borrower’s property. Citizens Advice said that creditors are using the courts to ‘intimidate’ vulnerable debtors into paying unaffordable amounts. It points to research showing that since 2000 there has been a 722 per cent increase in the number of charging order applications.

Borrowers with tracker or variable rate mortgages have benefited from a 17 per cent fall in the cost of owning a home in the past year. However, everyone else including tenants and those on fixed rate deals, have faced an increase of 4.5 per cent in the cost of household expenses. Energy costs rose by 13 per cent, water by 5 per cent, council tax and domestic rates by 3 per cent and the cost of repair work by 5 per cent, but for borrowers whose mortgage repayments have fallen these increases have not be enough to offset the 47 per cent they saved on interest repayments, the average mortgage rate falling to 3.62 per cent in April this year, from 5.8 per cent at the same time last year.

Treasury figures show that welfare payments will exceed income tax receipts by almost £25 billion in 2009/10. Treasury is expecting to take in £140.5 billion on gross income tax receipts, and pay out £164.7 billion in social security benefits, growing to £170.9 billion in 2010/11, equal to government spend on the NHS, schools and universities combined. The Treasury has blamed the worsening state of public finances on the ‘global financial crisis and recession’. 

In Scotland, the government has promised to pour £9 million into a new social housing pot. Communities minister Alex Neil announced the payout at a construction conference in Edinburgh, saying that 17 Scottish local authorities will benefit, and more than 1,300 new council homes will be built this year as a result.

Stirling council has become the first local authority in Scotland to ban the practice of evicting tenants who fall behind on their rent payments. Latest figures show the authority had evicted 23 such tenants in 2008, in moves the councillors called ‘draconian’. Shelter Scotland said it was delighted with the move and called on other councils to follow Stirling’s lead, stating that more than 97 per cent of the 3,577 evictions by councils and housing associations in 2007 and 2008 were for tenants who had fallen into arrears.

George Osborne, the shadow chancellor, is considering plans to stage a two-day emergency cabinet session soon after the Tories gain power, at which cabinet ministers would be collectively bound into large-scale spending cuts, according to shadow cabinet sources. The idea is modelled on some of the cabinet discussions held by the Labour government in the 1970s, and would bind high-spending department heads into an agreed decision on how spending will be brought under control. The Conservatives have said they may need to cut public spending by as much 10 per cent in the three years from 2011, excluding health and international development, to bring public debt under control.

The Governor of the Bank of England, Mervyn King, has warned that the nation faces a ‘long hard slog’ to recovery, criticised the government for running too high a level of borrowing as the nation entered the present crisis, and called on the Chancellor to produce a ‘credible statement’ of how he plans to get the borrowing down. Mr King’s outspoken remarks, given in testimony to the Treasury Select Committee and close to breaking the convention that the bank does not become embroiled in political arguments, came as the Organisation for Economic Co-Operation and Development said that the British government’s finances were sinking into the red faster than those of any other major industrial nation. The OECD forecast that the British economy would shrink by 4.3 per cent this year, with unemployment set to approach the 10 per cent mark: ‘The financial crisis has severely impaired the supply of credit and house prices have fallen sharply, thus restraining business and household spending.’

The nationalised bank Northern Rock has set much tougher guidelines for mortgage lending, it has been revealed. Despite ministers exhorting banks to lend more to kick-start the housing market, the government-controlled bank has set a cap of 2.1 times salary for poorer workers. Wealthier people are allowed to borrow 4.5 times salary, with a maximum of 4.2 times salary for wealthy couples. The arrangements are revealed today in a report by the Commons public accounts committee into the collapse of the Newcastle-based bank nearly two years ago. The report details a memo to MPs from Sir Nick Macpherson, permanent secretary to the Treasury, showing that Northern Rock will lend a maximum of 85 per cent on properties. Although this is higher than Treasury guidelines, which recommend 70-80 per cent of property values, it is considerably lower than the 125 per cent mortgages or six times salary dished out by the bank in the run-up to its collapse nearly two years ago.

Northern cities such as Hull and Sunderland that were battered by industrial decline in the 1980s have become the blackspots for youth unemployment in this recession, according to a report that calls for the government to target financial help on the worst-hit areas. The Centre for Cities thinktank research, published today, shows where the unemployment rate among the under-25s has risen fastest. Hull comes top of the list, where almost one young person in 10 is claiming unemployment benefit, but Barnsley, Doncaster, Middlesbrough and Wigan also figure in the top 10. The only southern cities that feature are Swindon, and Hastings, where youth unemployment has now risen to more than 8 per cent.

The number of mortgages approved for house purchase rose to a 13-month high last month as buyers returned to the property market. The British Bankers Association said 31,162 loans were approved for people buying a property in May, 7 per cent up on April’s figure and 16 per cent higher than in May last year - the first annual increase since November 2006. However, the positive news was tainted by a report from ratings agency Fitch which showed the number of homes in negative equity will rise sharply as house prices continue to slide. The ongoing weakness in the remortgage market dragged down overall lending figures, with total advances of £7.7 billion the lowest since February 2001.

Concerns that Northern Rock will be able to abuse its government-owned status to beat rivals are mounting ahead of the publication next week of an EU investigation into state aid for the Newcastle-based lender. The much-anticipated document on the government’s plans to split Northern Rock into a ‘good’ bank, bolstered with £14 billion of taxpayer funds to fuel mortgage lending, and a ‘bad’ bank, containing most of the troublesome legacy loans, will be followed by a month when interested parties can lobby the European commission. The Building Societies Association is concerned that Northern Rock might be able to squeeze out its members, many of which are already struggling in the downturn in demand for home loans.

One in ten borrowers is in negative equity, a report shows. It warned that further falls in house prices could see the proportion soaring to one in three. The international ratings agency Fitch said its findings point to a surge in mortgage defaults and repossessions. It said the East Midlands – and in particular Northampton, Nottingham and Derby – had the highest concentrations of homeowners with negative equity. In Northampton, 23.6 per cent of homes are valued at less than the mortgage. But in some city centres the rate is even higher – the peak is central Birmingham with 31.2 per cent and Salford Quays, Manchester with 29.6 per cent.

Homebuyers were dealt a fresh blow when two more leading mortgage lenders raised the cost of their most popular fixed-rate home loan deals. They were the latest in a string of increases over the past few days, and tonight there were predictions of more to come. Nationwide said it was increasing the cost of some of its fixed-rate deals by up to 0.5 percentage points - 11 days after it last raised its fixed rates. And Woolwich, the mortgage arm of Barclays, is raising the cost of its five-year fixed-rate deals by a similar amount. Last week Britannia Building Society and state-owned Northern Rock increased their fixed-rates by up to 0.9 and 0.7 points respectively, despite the Bank of England leaving base rates unchanged at a record low of 0.5 per cent.

Cuts in interest rates and pressure on lenders to be lenient on people struggling with mortgages appear to have borne fruit, according to data published yesterday. The number of mortgages slipping into arrears in the first three months of the year dropped by 12 per cent from the previous quarter to just under 60,000, the Financial Services Authority reported. Most of the decline was in non-regulated mortgages, which are dominated by buy-to-let and interest-only loans, but regulated mortgages falling into arrears were also slightly lower. Repossessions rose by 13 per cent to more than 14,800 in the first three months of the year, up from 13,100 in the previous quarter. This rate of increase was significantly slower than the 20 per cent or more seen in the second and third quarters of last year.

MPs investigating the banking crisis are to examine mortgage arrears and repossessions. The Treasury committee announced yesterday that it would open a short investigation into households which were struggling with arrears or at risk of repossession. The committee will look at the number of homeowners in arrears, the type of borrower who has had their property repossessed, and the treatment by banks of customers facing repossession.

A hundred thousand people a month are being made redundant as the number out of work soars to a 13-year high. The jobless total has reached the highest since late 1996, just before Labour came to power. Figures from the Office of National Statistics showed that 302,000 people were made redundant in the three months to April, 36,000 more than in the previous quarter and the most since records began in 1995. At the same time, the number of vacancies hit a record low. The number of people classed as officially out of work has soared to 2.26 million, an increase of 232,000 over the quarter and 605,000 over the past year. Britain’s unemployment rate is now 7.2 per cent, up 0.7 per cent from the previous three months.

The number of bosses who can see green shoots appearing in the economy has doubled since February, according to a ComRes survey for The Independent. Some 37 per cent of business leaders now detect signs of recovery in their company’s sector – up from 32 per cent last month, 29 per cent in April and 18 per cent in February. But the survey of 203 businessmen and women suggests that the Government is getting little political credit. The ratings of both Gordon Brown and Alistair Darling have dropped in the past month. Only 14 per cent of them have confidence in the Chancellor, his lowest rating since last September when the financial crisis broke out. Only 24 per cent think he understands business and only 26 per cent believe he is handling the economy responsibly.

English councils are sitting on £250 billion of property assets, but only 20 per cent of council finance directors have all the information they need to manage their estates, according to an Audit Commission report published today.The report points to the uphill struggle that local authorities will face in cutting costs as the government tries to trim ballooning public sector deficits.Bharat Shah, deputy chairman of the Audit Commission, said the simultaneous collapse of the property market and the parlous state of the public finances meant that councils were going to face years of straitened living.The Treasury wants the public sector to sell off £16 billion in assets by 2012 and to save a net £300 million by 2011 through improved management of public assets - for example, by selling or subletting surplus properties.

Tenants of landlords who bought properties during the buy-to-let boom are losing their homes in growing numbers, as exclusively revealed in the January/February issue of ROOF. Now the scale of the crisis is becoming clear as landlords find increasingly difficult to find mortgage payments. Buy-to-let properties are three times more likely to run into trouble than normal residential homes. In the first three months of this year, buy-to-let landlords lost 4,100 properties – 1,700 were repossessed and 2,400 handed to receivers to run. The problem for tenants is that they are usually unaware of the landlord’s difficulties and it’s only when the bailiffs come to evict them that they discover the property is about to be repossessed.

Cheltenham & Gloucester is repricing its entire fixed rate mortgage range offered through intermediaries from Tuesday. Halifax, which is also part of the Lloyds banking group, is raising the cost of selected fixed rate mortgages available through intermediaries from Tuesday. The two lenders declined to say by how much they were hiking their rates, but it is thought that C&G is raising its by between 0.5 per cent and 0.7 per cent, while Halifax is increasing its by between 0.3 per cent and 0.6 per cent. The move comes just days after Nationwide said it was increasing interest on all of its fixed rate mortgages by up to 0.86 per cent. Other lenders have since followed suit, including nationalised bank Northern Rock and the Chelsea Building Society, as well as a number of other smaller banks and building societies.

The burden of rising unemployment in England is falling mainly on the most deprived areas and threatens to undermine the government’s anti-poverty drive, Financial Times research has shown. An analysis of people signing on for the jobseeker’s allowance in the first four months of this year indicates nearly two-thirds of the 344,000 increase was in areas with above-average levels of deprivation. This confirms other data suggesting this downturn, far from being a mainly middle-class recession focused on south-east England, is primarily hitting low-income workers in the traditional industrial heartlands such as the Midlands and northern England. Unemployment, currently at 2.2 million, is likely to continue to rise for several months, the FT says.

The government is considering freeing up billions of pounds to build more council homes. Just 400 council homes were built in 2007, despite a waiting list which is expected to grow to five million by 2011. But the government is looking at letting councils keep profits from rents and right-to-buy schemes instead of passing them to the Treasury. This could unlock £72 billion to build 300,000 new homes over 10 years. Margaret Eaton, of the Local Government Association, said: ‘Allowing councils to keep the rent they collect and the proceeds from sales would be a huge boost to the economy. Thousands of homes could be built, improved or made more energy efficient if Government stopped taking this money.’ The LGA said 90,000 homes could be built in five years if the system was reformed. And, if councils were also freed from government debts, 300,000 homes could be built in a decade.

Almost half of all fixed rate mortgage deals now charge 5 per cent or more despite the Bank of England keeping interest rates at just 0.5 per cent, according to the Daily Telegraph. The finding comes after a week which saw several major high street lenders increase the rates on their fixed rates deals. The research by personal finance researchers Defaqto suggest that there are currently 1,096 fixed rate mortgages available, of which 576 charge 5 per cent or more. At the same time, standard variable rates (SVRs) vary upwards from the lowest offered by Cheltenham & Gloucester at 2.5 per cent. Halifax’s SVR is 3.5 per cent and HSBC’s is 3.94 per cent.

First-time buyers have been given a glimmer of hope as a couple of lenders introduced deals that will need only a 10 per cent deposit. Britannia Building Society, which is soon to merge with the Co-operative Bank, launched its product last week. The interest rate of 5.09 per cent is fixed for two years once a £599 fee is paid. The smaller Saffron Building Society also introduced a 90 per cent loan and a rate of 5.65 per cent. It is only available in Saffron’s catchment area. This is mainly East Anglia but also includes parts of east London including Hackney and Walthamstow.

The Government has missed a series of public-sector construction targets in areas such as housing, education and health, according to a report to be released this week by the Construction Products Association. The plan to upgrade 95 per cent of social housing to acceptable standards by 2010 is well behind schedule, the CPA says. More than 700,000 social homes, about 18 per cent of the stock, are not up to scratch.

One of the biggest buy-to-let landlords, Cevdet Caner,  has had his £ 20 million home, a six-storey property in Mayfair, seized in what is thought to be Britain’s biggest ever house repossession. Before going bust, Mr Caner had risen to become to a billionaire property magnate with a portfolio of nearly 30,000 properties. The repossession saga started in December last year, when administrators were appointed to oversee debts of £ 1.2 billion that Mr Caner owed various creditors following the collapse of his property empire in August. But Mr Caner, 35, fought the sale and eviction, blaming his financial woes on the banks who had pledged to loan him money but then apparently reneged on the deal, rather than on mismanagement.

The UK has ratified a United Nations convention enshrining the human rights of disabled people. The government minister for disabled people Jonathan Shaw said there are more than 10 million disabled people in the UK whose rights would be strengthened.

Latest figures from the Royal Institution of Chartered Surveyors show that the pace of house price decline slowed in May, while sales picked up. Around 6 per cent of estate agents said property values had risen in May, while 42 per cent said prices fell. Buyer inquiries rose for the seventh consecutive month, and at the fastest rate in a decade. The number of transactions completed in the three months to May was 11.8 up from 10.6 in April, although it remained 31 per cent lower than the same period a year earlier.

Meanwhile Communities and Local Government has released figures showing the average cost of a home jumped 1.1 per cent during the month. The annual rate at which prices are declining is easing slightly to 13 per cent, down from 13.6 per cent in March. The annual average house price paid by first-time buyers in April was 16 per cent lower than a year ago, while prices paid by owner occupiers were 11.9 per cent lower.

The (RLA) is warning buy-to-let investors that lenders may try to change their borrowing rates as property values fall. The RLA says some mortgage agreements allow lenders to alter their rates if the loan to value (LTV) changes significantly. Alan Ward of the RLA said lenders may look for large repayments of capital as well as charging more expensive interest rates.

Lender Britannia has boosted the mortgage market after introducing a new home loan offering 90 per cent loan to value. Available from today, the two-year fixed rate mortgage requires only a small deposit, seen as essential to help first-time buyers into the market. Nationwide has also announced it is launching tomorrow a new two- and three-year tracker deal for existing customers who are coming to the end of their loan, at 95 per cent loan to value.