Social housing is not a disincentive to work and there is no evidence of cultures of worklessness in deprived areas, according to new research by the Department for Work and Pensions. The research, which sought to explain why there are high levels of worklessness amongst social housing tenants, did find that the tax and benefit system acts as a disincentive and that many people are unable to get a grip on the interaction between earnings, tax credits and housing benefit.
A petition calling for a windfall tax, signed by 70 Labour MPs, is splitting the government. Those in favour of a windfall tax on energy companies are arguing that Britain’s worsening economy will cause ‘difficult social issues’ and say that at least one ministerial aid is ready to quit unless a levy is imposed.
But another tax – intended to regenerate empty commercial buildings – is threatening to leave parts of the country looking like ‘bomb sites’ as owners demolish buildings to avoid paying the tax according to the chair of a regeneration group. Until the last election, vacant offices and shops received a rate relief of 50 per cent, while industrial units gained full relief. Now all unused commercial property has to pay full business rates after a three- or six-month grace period.
The chancellor’s ‘dithering’ over stamp duty has ‘paralysed’ the housing market, and led to a 20 per cent fall in prospective buyers, estate agents claim. The National Association of Estate Agents said that the fall in new buyers, estimated by the Royal Institution of Chartered Surveyors, was in line with reports from its members that more than a quarter had seen sales fall as a result of the uncertainty over stamp duty.
The NAEA has also called on the government to take action on home information packs, saying they are not fit for purpose and will not simplify the house buying process. Chief executive of NAEA believes the slower housing market is making the situation worse, and the majority of property searches are out of date by the time the property is sold.
The latest mortgage figures, from the British Bankers’ Association, are out today and indicate that the number of mortgages approved for house purchases stabilised in July, but was still two-thirds lower than a year earlier. There were 65 per cent fewer loans than July 2007, but the figure was mostly unchanged from June 2008’s record low, and statistician with the BBA said that they it would be premature to think that they housing market is starting to recover as overall activity was ‘very low’. There has also been an 11.0 per cent drop in the average loan value.
Overdue mortgages are on the rise says Standard & Poor’s, the credit ratings agency. A report into nonconforming mortgages has shown the delinquency rate for sub-prime mortgages rose to a record 23.31 per cent high by June 2008, while the rate at which borrowers are pre-paying mortgages fell during the first quarter from 24.75 per cent to 23.98 per cent. For prime mortgages, the delinquency rate also rose. Northern Rock accounted for one in every 13 repossessions in the UK during this period.