The Bank of England (BOE) yesterday joined central banks around the world to launch a joint effort aimed at tackling the global credit crisis. The BOE, US Federal Reserve Bank, European Central Bank, Bank of Canada, and Swiss National Bank said they would each release additional financial reserves to free up credit and help prevent a global economic meltdown. The BOE is increasing the amount of money from £2.85 billion to £11.35 billion until mid-January, and will look at whether further amounts will be necessary after that.
Housing minister, Yvette Cooper, announced yesterday that older people will be encouraged to give up their council homes in cities and move to smaller properties in the country. In a voluntary scheme, they will be paid cash, helped to move, and given priority for council homes outside cities, to free up larger properties that can then be given to families in a bid to ease overcrowding. Officials believe that there are 445,000 ‘under occupiers’ in social housing.
Citizens Advice has attacked irresponsible lending decisions and ‘aggressive arrears management’ by sub-prime lenders, which is forcing households out of their homes. The number of repossessions is already at a seven-year high and is expected to rise by a further 50 per cent this year. One in five people who sought advice on mortgages or loan arrears from Citizens Advice are on a means-tested benefit, while a third had incomes below the UK poverty line. Chief Executive, David Harker, said that far from providing housing security and a valuable asset, ‘home ownership has proved a fast track to debt and homelessness for many vulnerable borrowers on low incomes’.
Social mobility in the UK remains lower than any other advanced nation according to research by the London School of Economics. The potential for children born in 2000 to move to a higher income bracket than their parents is still as low as it was for children born in 1970. For example a child born to wealthy parents who scored badly in tests as a 3-year-old, will have caught up with a more intelligent child born to poorer parents by the age of seven.
The latest Royal Institution of Chartered Surveyors (RICS) survey shows that sales of homes fell at their fastest rate for at least eight years, while the number of newly agreed sales dropped for a fifth month in a row in November. However the supply of properties on the market climbed, in what appears to be a rush to get a property sold before the widely forecast slowdown occurs. The biggest falls occurred in Northern Ireland, and prices are expected to fall further as confidence among the surveyors questioned reached their lowest level since the survey began in 1999.