The number of people seeking help after falling behind on their mortgages has increased by 5o per cent in the past year. In the three months to the end of September Citizens Advice saw a steep increase in the number of inquiries about mortgage arrears. There was also a 10 per cent increase in the number of people unable to keep up with their fuel payments. Most lenders started repossession action when people were on average four months in arrears, and almost half those seeking help were couples with children, including one in five who are single parents. 

Meanwhile house repossession poses the biggest threat to people’s mental health, according to research by a mental health charity. Forty-six per cent of those questioned rate repossession as the event that would most damage their mental health. Even those who could hang on to their home would end up suffering the stress and worry of arrears building up which, according to Rethink, can trigger mental illness or make people who are already vulnerable, worse.

These figures are not deterring cash investors into the property market however. As investors run from the banking system, those with cash for a large deposit and looking for a ‘long term’ investment are hoping for bargains. Buyers have been negotiating reductions of as much as 20 per cent on asking prices if they have the cash. With the market downturn reducing house prices by 15 to 20 per cent on last year’s values, the average income from rents has moved up to around 8 per cent, according to research by estate agents Knight Frank.

The National Housing and Planning Advice Unit has warned regional planning authorities they must acknowledge the impact of second home ownership on the housing market, and should factor it in to  regional spatial strategies. If they don’t, they risk creating further undersupply of homes. NPHAU suggests that, as the existing population gets richer and working patterns change, the demand for second homes will continue and is likely to grow.

A survey by a property website has found that city centre flats have seen the largest annual falls in price, with Birmingham Canal apartments topping the list after a 17.3 per cent drop in value. The price falls have not ‘discriminated’ according to how much a property cost in the first place or how desirable an area is. However, it is buy-to-let investors who are hardest hit.

And finally, a property developer is offering his £220,000 one-bedroom flat for sale, asking for a deposit of only 3 per cent. Brian Hughes is offering a rent now, buy later lease option, with the buyer and seller agreeing a price and a future purchase date. The buyer pays rent and additional monthly instalments and the initial deposit and cash built up from the instalments is then used as a deposit to buy the home with a mortgage, on a pre-agreed date. However, experts warn that the instalments are non-recoverable, and the terms of the contract are complicated requiring legal advice.

The Government is ‘urgently reviewing’ the new housing benefit scheme after it emerged that taxpayers were paying over the odds to house some families. Under the new local housing allowance rules, an assessment is based on a locality’s average rent - but the rates vary wildly in inner city areas.  Ealing council has disovered that it is paying £12,000 a month to house a family in a seven-bedroom house in London.

Meanwhile new powers to keep homes affordable in rural communities have been set out in a new consultation. Communities with severe housing shortages could be designated as protected areas to ensure housing is retained for local families. The government is also issuing a consultation on the expansion of community land trusts. Homeowners would pay only the cost of building, while land would be retained by the trust.

The International Monetary Fund said the world is in the grip of a severe downturn and America, Europe and Britain seem to be heading for a recession. Its bleak assessment, released yesterday, said  the countries’ economies are entering the most major downturn since the 1930s. Even the move by the world’s central banks to cut interest rates may not be enough to stave off recession, the IMF chief economist warned.

Shelter has called on banks and mortgage lenders to pass on yesterday’s interest rate cut and said that more than 900,000 homeowners are struggling or falling behind in their mortgage payments. The average monthly saving with the cut on a £200,000 mortgage is around £61 a month. Shelter’s figures indicate a massive 54 per cent increase in hits on the website from people seeking mortgage help and advice. However, already this morning one of the UK’s biggest lenders, Cheltenham & Gloucester, withdrew some mortgage deals linked to the base interest rate. Nationwide and Abbey are understood to planning similar moves.

And councils across the country stand to lose millions of pounds in the collapse of the Icelandic banks. Up to 20 councils, including Kent county council, which had £50 million invested, and Brent, £27 million,  have been told by chancellor Alistair Darling that they would not be treated like individual account holders - ‘they are a more informed investor’ - and would not have their deposits guaranteed. The Local Government Association has written to the chancellor asking that councils to be treated in the same way as individual savers, and is urgently requesting a meeting.

The fall in house prices may be stabilising according to the latest figures from Halifax. It recorded a 1.3 per cent fall in house prices in September - the smallest drop in seven months - however this took the annual year on year fall to 12.4 per cent,  one of the sharpest falls since the index began in 1983. This was the eighth consecutive month that prices have fallen, and the average price of a property is now at the level last seen in January 2006, at £172,108. Houses are also becoming more affordable as the figures indicate the house price-to-earnings ratio is down to 5.02 in July down from its peak of 5.84 the year before.

The UK’s housing system is ‘fundamentally broken’ requiring wide-scale reform if it is to deliver fair and affordable housing in the future, said the Chartered Institute of Housing in a response to plans that could form the basis for the Green Paper into housing reform to be published later this year. CIH wants house buying to become simpler, with greater choice and more flexibility in tenure - and social housing should no longer be ‘populated by a majority of people unable to progress in their housing and wider aspirations’, it says.

 The government has announced details of its £500 billion rescue package for the banking system. Making the capital available to eight of the UK’s largest banks and building societies in return for getting preference shares, the government is hoping to get the banks loaning to one another and kickstart the money markets again. Key points of the plan include making available £200 billion in short-term loans from the Bank of England, providing up to £250 billion in loan guarantees at commercial rates to get the banks loaning to one another, and having banks sign up to a Financial Services Authority agreement on executive pay and dividends.

But a number of analysts do not believe that the package will have much affect on the mortgage market. They fear that the extra money will only benefit those with a decent deposit of 25 per cent or more as the interbank loan rate - the Libor rate - is not tied to the base interest rate. First-time buyers and those with dodgy credit records will continue to struggle to find funding, or will have to pay significantly more for it. Even the anticipated cut in interest rates when the Bank of England’s monetary policy committee meet tomorrow is unlikely to be passed on to borrowers.

Falling house prices have caused a decline in the belief that property was the best way of saving for retirement. A survey by the National Association of Pension Funds found that one in five favoured property investments, down from one in four in February.

For the first time a housing association will include non-residents alongside existing customers in a decision-making body - giving them powers to shape the delivery of services. Midland Heart Housing, one of the largest housing associations in the Midlands wants members of local communities to have a  say in helping shape the association’s policy and services.

And finally, an estate agent in Merseyside is naming and shaming tenants who miss their rent payments, by putting up signs reading ‘Rent dodger lives here’. The agency hopes the signs will embarrass tenants into meeting their rent, but promises not to target genuine cases of hardship. The legality of the signs has been questioned.

The South West has become a ‘hotbed’ of repossession according to the latest figures from the Ministry of Justice. The number of repossession claims issued in Devon and Cornwall were up by 41 per cent this spring compared with a year ago, as hundreds of people are being forced out of their homes and into temporary accommodation, including caravan parks, each month. One court in Penzance saw 50 repossession cases in a morning. Citizens Advice said the problem is that there are lower than average wages and higher than average house prices in the South West - in some areas house prices are 23 times the average wage. Experts think the numbers will get worse in autumn.

More and more mortgage deals are disappearing - according to Moneyfacts there are now only 60 deals available for borrowers with a 5 per cent deposit, down from 384 at the start of April and from 860 a year ago. Even if borrowers can find a 95 per cent home loan they are being asked to pay interest rates of 7 per cent or more, ‘noticeably higher’ than mortgages with a larger deposit which are at around 6 per cent or less, or charged with higher up-front ‘higher lending charges’. Mortgages for 100 per cent or more of a property’s value disappeared at the start of the year.

The National Landlords Association (NLA) has however, dismissed claims that buy-to-let is dead. Since the nationalisation of Bradford & Bingley analysts have feared the market had ‘come off the rails’. But the NLA has said that this is fundamentally not the case, and that only 25 to 30 per cent of landlords use buy-to-let mortgages, meaning that the majority were untouched by the situation at Bradford & Bingley. A spokesperson from the NLA said it was simply not true that the nation’s landlords are ‘now facing some sort of crisis’.

Meanwhile a number of leading registered social landlords (RSLs) including the Guinness Partnership, William Sutton Homes and Genesis Homes have joined together to create a new property marketing service for shared ownership properties. It aims to provide a more professional and cost-effective solution to the nationwide marketing of affordable housing. Guinness partnership said that RSLs spend millions annually marketing their properties through companies like Rightmove and Primelocation, so it made sense to do what ‘estate agents did years ago when they worked together to set up the likes of Rightmove…’

In response to the regulator’s initial report on the energy market, the National Housing Federation (NHF) has slammed Ofgem saying it failed some of the poorest customers in the country and should be scrapped. Ofgem demanded that big energy companies should stop charging poor people on prepayment meters a higher rate for gas and electricity, but favoured a voluntary scheme to tackle  the problem.

Westminster City Council has counted its lowest number of rough sleepers ever. The number of rough sleepers has decreased by more than 20 per cent - from 89 to 69 since March this year, and is the fourth count in a row to show a decline. Three years ago Westminster became the first council in the country to move the core part of its outreach services for homeless people from the street and into buildings allowing for extended and rapid assessment, and last year the council said it helped 750 people off the street and into accommodation.

Friday’s reshuffle saw Margaret Beckett take over as the new housing minister, the third this year. The Guardian says, although it was denied by Downing Street, that Jon Cruddas was initially offered the housing post but turned it down after he was told that he could not start a big housing programme.

Several charities are involved in a high court judicial review today to force the government to stand by promises it made in 2000 to eradicate fuel poverty and help millions of households facing a winter of growing gas and electricity bills. Help the Aged and Friends of the Earth say the government is legally bound by promises it made and legislated on, to abolish fuel poverty by 2016 and eliminate it from the most vulnerable households by 2010. 

Meanwhile Gordon Brown is under pressure to guarantee all savings in British bank accounts after Germany and Denmark become the latest European countries to do so. Alistair Darling has so far raised the guaranteed level of deposits from £35,000 to £50,000, as banks hold around £2 trillion in private and corporate accounts. Today is the first day of the government’s ‘economic council’ and ministers are due to meet. They are said to be angered about the decision made in Germany by Angela Merkal, but will probably follow suit in order to prevent the large-scale flow of capital out of the country.

The Royal Institute of Chartered Surveyors has warned that the housing target of building two million new homes by 2016 is looking further out of reach than ever as the downturn in the industry is sending growth in the private housing sector to a record low. The government needs to build in excess of 200,000 house each year to reach its target, and to date only 66,000 new homes have been built this year, with predications that the figure will fall below 25,000 per quarter by the end of the year. Following the decline over the past two quarters, the private housing sector workload plummeted again with 60 per cent more surveyors reporting a fall than a rise nthis quarter. Meanwhile the amount of public housing work hit a six-year low also.

But house prices are going to rise again, according to research by the economic consultancy Centre for Economic and Business Research (CEBR). As government targets for the minimum number of new homes being built are not being met, demand will inevitably outstrip supply, fuelling a new boom say CEBR, that may be every bit as large as the current price fall: ‘The sharp drop in completions will mean higher prices if and when the credit markets sort themselves out’.

According to figures obtained by the Mirror, the Ministry of Justice has spent £230 million on hotels and dinners, and just £16 million on upgrading housing for members of the forces. In 2006/07 when these figures were collected, there were 400,000 complaints about housing from army families, while MPs warned that 19,000 houses out of 70,000 married quarters and 165,000 single people’s quarters were in disrepair. A spokesperson from the Army Families Federation said that accommodation was, and still is, sub-standard.