TRAVELLERS WHO ‘PLAY BY THE RULES’ WILL GET MORE RIGHTS

Travellers who play by the rules will get the same rights as other mobile home residents and could benefit from more authorised sites, under plans announced by Communities and Local Government Secretary, Eric Pickles.

At the same time, top-down Whitehall planning rules on travellers which Ministers believe has undermined community cohesion and harmed the countryside will be scrapped.

Travellers on official local authority sites will benefit from changes to legislation that will give them the same rights and responsibilities as residents on other mobile home sites. Travellers who abide by the terms of their pitch agreement will have greater protection against eviction, and have the same rights and responsibilities as other social tenants.

The Government has announced that councils will be given incentives through the New Homes Bonus scheme to deliver new housing. Ministers are announcing today that this will include authorised traveller sites. This means that councils will get financial benefits for building authorised sites where they are needed. This will ensure that all types of authorised residential developments are treated equally.

The Government has already freed councils from the top-down Regional Strategies and the associated building targets; this now allows councils to decide for themselves how many traveller pitches are necessary in their area according to local need and historic demand.

Following through on this policy, Ministers are announcing their intention to revoke what they regard as flawed Whitehall Planning Circulars on travellers. The planning rules have been criticised by many local councils, some of whom have said this has compelled them to build on the countryside and compulsorily purchase land.

Such rules have, Ministers believe, undermined community cohesion by creating a perception amongst many people of 'different' planning rules for the travelling community and for the settled community. Planning rules should be the same for all.

The Government is concerned about the growing number of unauthorised developments and encampments and the problems they cause within communities. Mr Pickles is looking at ways to strengthen the powers available to councils to more effectively tackle unauthorised development. This will include action against speculative, unscrupulous private developers.

Pickles said: "Unauthorised developments have created tensions between travellers and the settled population. We want to redress the balance and put fairness back into communities. Like the rest of the population, the majority of travellers are law-abiding citizens and they should have the same chance of having a safe place to live and bring up their children. These changes will put travellers who play by the rules on an equal footing.

"But at the same time, we will not sit back and allow people to bypass the planning rules that everyone else has to abide by. That's why we will strengthen the powers that councils have to enforce against breaches of planning rules and tackle the abuse of the planning system."

www.communities.gov.uk

FOUR MORE YEARS OF NEGATIVE EQUITY FOR HOMEOWNERS WHO BOUGHT AT PEAK

Tens of thousands of homeowners who bought during the housing boom face another four years of being trapped in negative equity, according to a new forecast published by the National Housing Federation.

People who purchased a property in England at the peak of the market in 2007 paid an average price of £216,800. But they have been warned they will have to wait until 2014 – when average prices are predicted to hit £226,900 - before they recover what they paid for their home seven years earlier, according to the research.

Independent economists Oxford Economics forecast house prices would increase 22% over the next five years – fuelled by a chronic under supply of new housing. House prices will rise 7.5% this year, but will then fall again in 2011 by 3%, before recording a modest increase of 0.9% in 2012.

House prices will then increase by 4% in 2013; 5.4% in 2014, and; 4.9% in 2015 – 22% higher than they were in 2009. Homeowners who bought during the peak of the market in 2007 are likely to experience continued negative equity until 2014 – based on average house price figures for England.

The Federation said it feared an entire generation of people would be locked out of the housing market as a result of high house prices. And the chronic shortage of social housing will leave those shut out of the home ownership market with little realistic chance of getting a social home.

The report, Home Truths 2010, shows the country is in the midst of the worst housing crisis for generations. It found that while demand is growing, supply of new housing is falling. In 2009/10 just 87,360 new homes were started in England, producing only enough homes for a third of the new households forming each year.

Despite the recent recession, house prices nationally are still 19% higher than five years ago and 120% higher than 10 years ago. More than 1.76m households, or the equivalent of 4.5 million people, were on social housing waiting lists in 2009, a 23% increase in the last five years.

Federation chief executive, David Orr said: “For those who bought at the peak of the housing boom, there's a strong possibility that they will have to wait another four years before their home is actually worth what they paid for it.

"But house prices will inevitably increase in the long term because of huge under-supply of housing. Even though price rises look sluggish for the next few years, affordability is not improving for many low-to-middle income households - as banks continue to restrict their mortgage lending and house prices remain historically expensive in relation to salaries.

“There’s a very real risk that an entire generation will be locked out of the housing market for the foreseeable future and people will increasingly look to buy or rent an affordable home instead. But the Government’s decision to scrap regional house building targets, withdraw funding for new affordable housing schemes and to cut budgets, means the future looks bleaker than ever for millions of people currently stuck on waiting lists.

“Proposed caps on housing benefit payments could also put nearly a million people on low incomes at risk of losing their home – and further deepen the nation’s dire housing crisis. We would urge the Government to closely consider the huge human, social and economic cost of failing to invest in affordable housing."

Mr Orr added: "We understand the need to reduce the deficit and housing associations are continually thinking about how to build homes while being even more effective and innovative – and maximising the value they deliver for the public money invested."

www.housing.org.uk

Economists have warned that the housing market was facing a fresh round of price falls as mortgage lending remained subdued.

Figures from the Bank of England showed that only 48,722 mortgages were approved for house purchase during July.

Although the number was slightly up on the previous month, it remains well down on the monthly level of 70,000 to 80,000 approvals for house purchase that are consistent with a stable market.

Andrew Goodwin, senior economic advisor to the Ernst & Young ITEM Club, said: "This morning's figures provide further confirmation that the housing market is heading for a double dip, with net mortgage lending pretty much flat and the number of mortgage approvals remaining very low.

"The figures for mortgage approvals, a proxy for activity, tend to be well correlated with prices and the latest figures clearly point to falling prices over the second half of this year and into 2011, particularly now that supply shortages have eased."

Today's figures are the latest in a raft of gloomy data on the housing market, which has failed to benefit from its traditional summer bounce.

Nationwide reported a 0.5% house price fall during July, while Halifax has reported falls for four of the first seven months of the year.

The main problem for the housing market is that the key factor that supported house prices during 2009, namely a shortage of supply, has now been reversed.

The house price rises seen during 2009, combined with the abolition of home information packs, has tempted more homeowners to put their properties up for sale.

But the rise in the supply of homes has not been matched by a rise in demand, despite initiatives such as the stamp duty holiday for first-time buyers purchasing properties worth up to £250,000 and record low interest rates.

Instead a lack of mortgage finance is continuing to limit the number of people who can buy a home.

Mortgage repayments for first-time buyers have nearly halved during the past three years due to record low interest rates and house price falls, according to new research.

A typical first-time buyer now spends just 28 per cent of their pay on monthly mortgage repayments, down from a peak of 50 per cent in June 2007, according to Halifax.

At the same time, 94 per cent of homes bought by first-time buyers are now exempt from stamp duty.

But despite this only 35 per cent of people hoping to take their first step on to the property ladder say they are able to take advantage of the improved conditions, with more than half saying buying a home is still out of their reach.

Only 94,600 people bought their first home during the first six months of the year, around half the number who got on to the property ladder during the same period of 2007, although the figure is 28 per cent higher than in the first half of 2009.

However, there are signs that first-time buyers are becoming more confident about mortgage availability, with just 3 per cent saying a lack of suitable mortgages had prevented them from buying a home.

Halifax added that its figures showed eight out of 10 first-time buyer mortgages were approved during the first half of the year. People buying their first home put down an average deposit of £30,380 during the second quarter of the year, the equivalent of 22 per cent of their home's value.

The group estimates it takes the typical first-time buyer between three and five years to save their deposit in the current market. More than a quarter of first-time buyers have not taken a holiday for more than a year in order to save for a deposit, while 10 per cent have moved back in with their parents and 12 per cent have taken on a second job.

Stephen Noakes, commercial director for mortgages at Halifax, said: "We believe it's important that first-time buyers understand that while there are still challenges in raising deposits, other market conditions are more positive.

"Affordability has significantly improved, meaning the amount of a typical first-time buyer's monthly pay packet that needs to be dedicated to their mortgage is now below the 25-year average and importantly, despite perceptions, eight out of 10 first-time buyer mortgages are approved."

The research was based on Halifax's own data and a survey of 500 first-time buyers carried out by ICM during August.

www.halifax.co.uk

Thousands of women fleeing domestic violence, pensioners who rely on home-help support and people with mental health problems could be forced to fend for themselves under expected cuts to a major government support programme, the The National Housing Federation has warned.

David Orr
It said that with the Treasury instructing all departments to model cutbacks of up to 40 per cent almost 438,000 vulnerable people could see the outreach support that enables them to lead independent lives axed, and temporary accommodation shut as a knock-on effect.

It said the Supporting People programme saves the taxpayer money by preventing cash being spent on health, social services and the criminal justice system. It fears that a 40 per cent cut to the programme would end up costing the taxpayer £1bn a year in the longer-term through increased demand on services.

The Federation added that cuts to the Supporting People programme could lead to an increase in crime, with the closure of hostels for ex-offenders and a reduction in the number of ex-offender support workers. Almost 3,600 former prisoners across the country would get less supervision, and support, to help them reintegrate into society – and therefore be at a greater risk of re-offending.

The Treasury has ordered all government departments to model cuts of 40 per cent in advance of the autumn's spending review and the Federation believes that cuts of this order would have a dire impact on the lives of thousands of those currently receiving vital support and have a substantial social and financial repercussions.

There is no specific statutory duty to support many of the client groups who currently receive housing related support. The long-term financial costs would also outweigh the short-term savings from cutting back on services – as demands on the NHS, police forces and the courts surge as a result.

It said that investment in preventative support through housing associations leads to better outcomes for service-users, their families and savings to health and social services budgets, through the avoidance of hospital admissions and reduced numbers of children being taken into care.

A national evaluation has estimated that the £1.6bn spent annually on housing-related support through the Supporting People programme generates savings of £3.41bn to the public purse – by intervening earlier to prevent more severe problems arising, helping people live more independently and avoiding more costly acute services.

Single homeless people use around four times more acute hospital services than the general population, costing at least £85 million in total per year, according to Department of Health. That figure is likely to rise sharply if support is withdrawn to prevent homelessness. Research also shows that having stable accommodation reduces the risk of re-offending by a fifth.

Federation chief executive, David Orr said: “Supporting People services help hundreds of thousands of vulnerable people lead independent and secure lives, and saves the taxpayer billions of pounds through the avoidance of costly hospital admissions and recourse to other services.

“If the Supporting People budget is substantially cut it will lead to many vulnerable people losing the support they depend on, with the result that they will no longer be able to lead self-sufficient lives and will increasingly have to rely on acute health and other services.

“The Government has repeatedly said that it wants to protect the vulnerable and yet these cuts would hurt many of the most susceptible people in society. It would also lead to increased demands on the health service, social services and the criminal justice system – and have profound social repercussions.”

www.housing.org.uk

Demand for student accommodation is driving up house prices in university towns, new research has indicated.

Six out of 10 university towns across the UK have seen house price rises which have outstripped increases across their region as a whole during the past five years, according to high street bank Lloyds TSB.

The biggest price jumps have been seen in towns that have seen a significant rise in their student population during the same period. Aberdeen has seen the biggest increase in house prices for a university town since 2005, with the average cost of a property rising by nearly 40 per cent during the period.

The rise, which was more than double the 14 per cent reported across the whole of Scotland, coincided with a 54 per cent jump in the number of students studying in the city. There has also been a 34 per cent rise in house prices in Coleraine in Northern Ireland, where the University of Ulster has a campus, following a 30 per cent jump in the town's student population.

House prices in Winchester have risen by 30 per cent during the past five years, compared with an increase of just 2.5 per cent across the whole of the South East, while student numbers in the town have soared by 78 per cent.

A similar pattern has been seen in Carmarthen in Wales, with house prices rising by 29 per cent since 2005, compared with a 4.4 per cent fall across the rest of Wales, while student numbers are 69 per cent higher. But the group said a rising student population did not always lead to strong house price gains.

Edinburgh has the eighth highest number of students in the UK, but house prices in the city have risen by only 11 per cent during the past five years, underperforming the wider region. The slower growth is despite the fact that the number of people studying in the city has increased by more than a third during the same period.

London and Glasgow have also seen house price growth of only 5 per cent since 2005, despite their student populations rising by 76 per cent and 43 per cent respectively. The average cost of a home in Birmingham is also 3 per cent lower than it was five years ago, despite a 66 per cent jump in the number of students at universities in the city.

Nitesh Patel, housing economist at Lloyds TSB, said: "Growing student numbers have had a big impact in boosting house prices in some university towns - where the increase in demand has led to the local market outperforming the rest of the region.

"However, it's a very mixed picture for some of the UK's largest university towns that have seen their student population increase significantly, without it impacting on house prices.

“In the past five years the population across university towns in the UK has increased by nearly a million students.

“Naturally, this has boosted demand for property and land to provide suitable accommodation for students."

www.lloydstsb.com

Nearly half (47%) of possessions by landlords are due to tenants not paying their rent, according to research published by the National Landlords Association (NLA).

It follows recent data released by the NLA showing a fifth of private-residential landlords had tenants in rent arrears during Q2 2010. Whilst one-third of landlords had never sought to end a tenancy, the survey found 23.3 percent of had because of anti-social behaviour by tenants.

Landlords reported in 57 per cent of possession cases the tenants took less than three months to move out, while 81 per cent of cases were resolved within five months.

David Salusbury, Chairman, NLA, said: "Gaining possession can be very costly for landlords, especially when it is related to rental arrears. Many landlords have mortgages to pay on top of the expense of gaining possession. One-third of landlords have reported paying between £250 and £1,000 to have tenants removed. This amount is often compounded by late rent payments."

NLA Rent Arrears is a cost-effective service to help resolve rent arrears' issues or undertake possession proceedings. Specialists will act as a mediator between the landlord and tenant in order to collect outstanding rent or seek possession through the courts.

Alternatively, landlords can take out NLA Rent Guarantee Insurance which covers up to £2,500 per month for unpaid rental income if the tenant falls into rent arrears.

www.landlords.org.uk

Landlords pushed up rents for the sixth consecutive month, raising them by 0.5% in July, according to the latest Buy-to-Let Index from LSL Property Services.

The average UK rent is now £676, 2.3% higher than a year ago. This rise follows the increase of 1.4% in June. Rents are now just £12 per month shy of their peak two years ago. With the increase in rents, the average yield was 4.9% in July.

David Brown, commercial director of LSL said: "Rents are still playing catch-up with the gains house prices made in the last year. The recovery in prices 12 months ago caused an exodus of accidental landlords from the market, ending the glut of supply of rental accommodation.

"Although house price rises have levelled off, landlords are still reaping the benefits of the constrained supply, and the improving yields have restored a healthier balance to the dynamics of property investment.

"And we don't expect rents to fall away any time soon. With inflation well above the MPC's target, interest rates can only go one way - north. When they rise, many landlords will face increased monthly mortgage repayments - and many will try to raise their rents to cover the difference."

Tenant finances were in their best shape in at least two years, with arrears dropping to just 9.2% of all rent across the UK. This was a fall from 11.2% at the turn of the year, and is the lowest level since LSL Property Services plc began compiling the figures in 2008. In July, £212.9m of rent was unpaid - a substantial drop from its peak of £361m in August 2008. Just 434,803 tenants fell into arrears in July - 26,761 less than in June. The drop in arrears means that the average yield, adjusted for voids and arrears, was 4.5% in July - an increase from 4.4% in June.

David said: "There's no evidence that the increase in rents has led to a surge in arrears. In fact as rents have risen in the past six months, arrears have steadily dropped. The key is the current tenant mix. Thousands of frustrated first-time buyers are staying for longer in the private rental sector. These tenants are in better financial state, and are better able to meet rising rents in full and on time."

As a result of the recent declines in house prices, the total return from investing in buy-to-let over the last year dropped slightly to 10.1% in July. The average landlord would have made a total return of £15,961 in the past year, £8,706 in capital gains and £7,255 in rental income.

An investor buying property now could expect a total annual return of 3.5%, the equivalent of £5,838. The lack of house price inflation in the past three months means that if conditions remain constant, all of these gains will be driven by rental income.

www.lslps.co.uk

Home buyers can access more information about their new home without having to pay for the information, the Government has announced.

The fixed fee charged for personal searches of councils' local land charges register is to be abolished. Such land searches tell a home buyer about restrictions or issues that affect the property, such as planning conditions, conservation areas and protected trees.

The new Government has already suspended costly and bureaucratic Home Information Packs. The move will further help reduce costs for home buyers.

The law is now being changed to stop people being charged a £22 fee for a personal search of the Local Land Charges Register. This move is intended to make key environmental information more accessible to the public.

Making sure that this information can be accessed free of charge fits with the Government's wider drive for 'open data' to make public sector information more transparent and accessible to the public online. Local councils are in the forefront of this agenda to increase accountability and open up the books.

Housing Minister, Grant Shapps, said: "Moving home is difficult and stressful, and the new Government wants to make it easier. We've already taken steps to scrap Home Information Packs, and now we are cutting the cost of researching the detail about your new home.

"This shows in practice how freeing up public sector data and opening up the books can benefit the whole economy, by cutting transaction costs and increasing competition."
www.communities.gov.uk

Due to a fundamental shortage in the supply of houses in the UK, property prices will rise by about 4% this year experts have said, countering fears of further declines in prices.

Doomsayers who have spoken of a double dip in house prices "got it wrong", the Centre for Economics and Business Research (Cebr) said. It added that prices will continue to rise every year until at least the end of 2014.

Price rises are expected to moderate from now until the end of 2011, the group said. Growth will firm up again in 2012 to about 5% it believes, followed by further increases of 5.4% in 2013 and a 3.9% jump in 2014.

This Cebr analysis is in marked contrast with a recent forecast from the National Institute of Economic and Social Research, which said that over the next half a decade there would be an 8% fall in real terms in the market.

Recent industry figures also raised fears the market bounce back was over, with Nationwide's latest index revealing a 0.5% drop in prices in July - the first decline recorded by the building society since February.

This came after a slew of less positive readings from the sector as househunter numbers have dwindled amid uncertainty over jobs and the wider economy following the Government's emergency Budget.

Cebr said: "It is unfortunate, but hardly surprising, that many commentators are currently purporting that the minor correction in house prices over recent months is a prelude to an even steeper decline that will engulf the housing market over the coming years."

The June data from Land Registry's House Price Index shows an annual price increase of 8.4%.

This is the eighth month in a row in which the annual figure has been positive and takes the average property value in England and Wales to £166,072. The monthly change from May to June is an increase of 0.1 per cent.

House prices are now around the same levels as they were in the summer of 2006. All regions in England and Wales experienced increases in their average property values over the last 12 months.

The region with the highest annual price change is London with an increase of 12.2%. The region with the smallest annual price rise is the North East with a movement of 0.7%.

Wales experienced the greatest monthly rise with a movement of 2.9%. The North East region experienced the most significant monthly price fall with a movement of -1.3%. The most up-to-date figures available show that during April 2010, the number of completed house sales in England and Wales rose by 26% to 49,323 from 39,280 in April 2009.

Simon Rubinsohn, RICS chief economist said: “The data suggests house prices on completed sales in England and Wales edged up a further 0.1% in June. As a result, house prices on this measure are just 9.5% away from their previous high, recorded in November 2007.

“The strongest monthly gain in June was in Wales but London continues to post the highest year-on-year increase (12.2%). The Welsh data is not only out of line with recent Land Registry figures but also with the results of the RICS Housing Survey making us question the sustainability of this rise in prices. More generally, most RICS indicators suggest that prices across England and Wales could slip back a little during the second half of the year. London may be the exception to this.

“The more worrying element of the Land Registry data is the continuing weakness in transaction activity. While the latest numbers only refer to April, they show completed sales in England and Wales at less than 50,000. Moreover, subsequent figures on mortgage approvals suggest that this number is unlikely to pick-up anytime soon.

“With the average number of monthly transactions prior to onset of the credit crunch roughly double this figure, it is clear mobility has been impacted and many people who wish to take their first step on the property ladder or move home have been unable to do so.”

www.landregistry.gov.uk

Mortgage lending fell in June as the housing market continued to struggle to pick up momentum, according to figures from the British Bankers' Association.

The number of loans advanced last month - a total of 34,813, compared with 36,418 in May - was the lowest since February, when poor weather and the reinstatement of stamp duty combined to hit activity in the market.

Net mortgage lending, which excludes redemptions and repayments, also fell from £2.5 billion in May to £2.1 billion in June.

Although borrowing on credit cards rose, the increase was largely due to repayment of interest and charges rather than new spending.

Consumers repaid more than they borrowed for a 14th month in a row, while lending via loans and overdrafts fell by £314 million.

Unsecured lending has now contracted by 2.7% during the year to the end of June, the group said.

Savings levels picked up slightly in June, after falling sharply in May and being negative in April.

Deposits held by consumers rose by £1.65 billion during the month, up from £856 million in May, but down on the previous six-month average of £2.7 billion.

House prices in England and Wales have fallen for the first time in 2010 last month as new sellers reduced their asking figures to remain competitive, according to research.

During the four weeks to July 10, the average asking price for a property was £236,332, a 0.6% drop from the previous month.

Property website Rightmove said about 30,000 new homes were appearing on the market every week, which was nearly double (45%) the average of July 2009.

The group said there are now five new potential homes for sale for every two buyers with an approved mortgage, as the average number of properties managed by estate agents reached 77.

This is the highest level since August 2008, and Rightmove said it expected house prices to lose the 7% increases they had made so far this year, which pushed prices up £15,506 to reach an average peak of £237,767 in June, by the end of 2010.

Miles Shipside, Rightmove commercial director, said: "More aggressive pricing is likely to see the average price gains of 7% for the first half of the year wiped out by year-end, in line with Rightmove's original forecast for the year of no net change in prices."

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Almost three-quarters of people with a mortgage have no idea what impact an increase in the Bank of England's base rate would have on them, a survey has found.
The newly formed Consumer Financial Education Body (CFEB) found approximately 74% of people did not know how a 1% rate hike would affect their monthly outgoings.

Some 15% could not recall what type of mortgage they have. They could potentially be unaffected by a rate hike if they have a fixed rate deal, but would need to adjust to the new rates if they have a variable rate mortgage. A further 15% were unaware of when their current mortgage deal comes to an end.

The lack of awareness comes despite the fact that 51% of people with a mortgage expect interest rates to rise during the coming nine months.

Just over half of people said they had no plans to review their mortgage, or would leave doing so until just before their existing deal expired, while 14% admitted they did not know what they would cut back on if their mortgage repayments rose by £200 a month.

Chief executive of the Consumer Financial Education Body, said: "Lack of time means many of us often put off reviewing our finances, but it doesn't have to be time consuming to keep on top of your money matters."

Mortgage availability is expected to worsen during the third quarter of the year as lenders find it harder to raise funds, research has suggested.

A balance of 11.4% of banks said they expected to lend less during the coming three months, due to an anticipated tightening in the wholesale funding markets, according to the Bank of England's Credit Conditions Survey.

Lenders also expected caution about the economic outlook to constrain lending levels, while they do not plan to expand their market share - a factor that had led to a small increase in mortgage availability during the second quarter.

Concerns about the state of the economy led to the availability of credit for businesses rising by less than had been anticipated during the three months to early June, although banks expect lending to firms to increase slightly.

But despite the rise in mortgage availability, lenders said demand among people buying a property had weakened for the second consecutive quarter as activity in the housing market remained subdued, although there was a slight increase in the number of homeowners remortgaging.

Increased competition led to a narrowing in the margins lenders charged on mortgages and this trend is expected to continue during the coming three months. The proportion of a property's value banks were prepared to advance also rose for the third consecutive quarter.

Lenders reported that the number of people defaulting on mortgages fell unexpectedly during the second quarter, continuing the downward trend that began during the first half of 2009. This trend is expected to continue, although lenders warned that a deterioration in the economy could cause default levels to rise again. There was also a fall in the number of people defaulting on unsecured debt, which lenders attributed to the tighter credit scoring they now use.

The availability of unsecured credit remained broadly unchanged during the second quarter, although it is expected to increase slightly during the coming three months. Banks loosened their lending criteria for credit card customers for the first time in two years, but they have continued to tighten it for other borrowers.

In terms of business, the survey found that the availability of credit increased for both small firms and medium and large companies during the second quarter. But lenders reported an unexpected fall in demand from medium and large businesses due to the economic uncertainty, with lending largely driven by firms refinancing maturing facilities. Increased competition continued to lead to improvements to both the price and terms of lending for companies, particularly for lower risk firms.

www.bankofengland.co.uk

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The cost of owning and running a home in the UK has declined by six per cent over the past two years, according to new research by Halifax.

Between April 2008 and April 2010, the average annual cost associated with owning and running a home fell by £544 from £9,564 to £9,020. In real terms (i.e. after allowing for retail price inflation), the cost of housing has fallen by 9%. Housing costs in the UK are now equivalent to 27% of gross average full-time earnings, down from 30% in 2008.

The fall in the cost of housing since 2008 has been driven by a 19% (£881) decline in mortgage payments (interest and capital repayments). The average mortgage rate paid by existing borrowers fell by 2.13 percentage points between April 2008 and April 2010 from 5.80% to 3.67%.

Regionally, London (£11,762) and the South East (£10,457) have the highest average annual costs of owning and running a home. Housing costs are lowest in Northern Ireland (£7,331).

Home owning and running costs as a percentage of gross average full-time earnings are lowest in London (24%) despite the capital having the highest absolute costs. However, with the level of earnings varying considerably across the capital, housing costs will be much less affordable for a significant number of households. Housing costs are highest in relation to earnings in the East of England (31%).

Over the past year, the average expenses associated with owning and running a home have increased by 1.3% (£116). This is less than a third of the rise in retail prices (5.3%).

Suren Thiru, housing economist at Halifax, said: "Over the last two years, the cost associated with owning and running a home in the UK has fallen, entirely as a consequence of reduced mortgage payments. The drop in housing costs has helped to ease the strain on household's finances, providing some relief to homeowners during the economic downturn."

www.halifax.co.uk

UK tenants face the highest rents in western Europe, new research from Easyroommate.co.uk has shown.

It costs an average of £348 a month to rent a room in a shared property in the UK, 75% more than in Spain, where rents average just £199 a month. France was the second most expensive country in which to rent a room, but at an average of £285 a month rents were still considerably cheaper than in the UK, while in Italy they averaged £282 a month.

The group blamed the high cost of renting a room in the UK on the lack of mortgage finance currently available, which it said was forcing potential first-time buyers to continue renting, driving up demand.

But it said banks on the Continent were beginning to lend again, with the latest European Mortgage Federation report showing that total mortgage advances in France had risen by 29.2% during 2009, while in Spain they were 6.2% and in Italy they rose by 2.6%. However, mortgage lending in the UK actually contracted by 21.4% during the same period.

Jonathan Moore, director of Easyroommate.co.uk, said: "The rent is far higher for British flatsharers than it is for their European counterparts. The strength of the pound against the euro plays a part - but that's not the whole story.

"Brits are paying more for their accommodation because frustrated first-time buyers are pushing up demand for rental properties."

But despite the UK having the highest average rents, the most expensive city in which to rent a room was Milan in Italy, at a typical cost of £621 a month. London was the second most expensive place at an average of £551 a month, followed by Rome at £441, Paris at £426 and Nice at £380.

Birmingham, Manchester and Leeds also made it into the list of the top 10 most expensive cities in which to rent a room. Valencia in Spain is the cheapest place to rent, at an average cost of £207 a month, with Seville and Zaragoza, also in Spain, both also featuring in the top five cheapest cities for renters.

www.easyroommate.co.uk