‘Dramatic’ drop in retirement saving


A major report, published by Scottish Widows, reveals a dramatic deterioration over the last 12 months in the number of people saving adequately for retirement.

This provides one of the starkest warnings yet that, as a nation, we are simply not saving enough for our old age, said the insurance company.

Two key measures used to monitor pensions savings behaviour have fallen significantly since 2005.

The Scottish Widows Pension Index, which tracks the percentage of the population saving adequately for retirement, falls from 55% in 2005 to 46% in 2006. And the Scottish Widows Average Saving Ratio, which tracks the percentage of income being saved for retirement by UK workers not expecting to get their main retirement income from a defined-benefit scheme, drops from 7.9% to 5.8%. This falls significantly short of Scottish Widows’ recommended target savings ratio of 12% of earnings.

Ian Naismith, head of pensions market development at Scottish Widows, says: "The deterioration in the Index and the Ratio is very disappointing when you consider how high profile pensions have been in the last 12 months."

"In fact, our figures show that 4 in every 5 people who aren’t relying on a final-salary pension are failing to save adequately for their retirement, and that 2 in 5 are saving nothing at all. With this level of under-saving, no-one can be in any doubt about the challenge facing us all when it comes to preparing for retirement."

There also is little support for working beyond the state retirement age, with only one-in-three people (34%) saying they would be happy for it to go above 65 (as proposed in the pensions White Paper) to avoid large tax increases.

However, a third (33%) of those not saving at all say they would be willing to work beyond 70, suggesting they have a more realistic view about the consequences of not saving.

Naismith concluded: "Although it is too early to tell it does appear, regrettably, that the noise surrounding pensions could have led many to put their retirement savings on hold while they wait and see what happens with the much-publicised government reforms. There also appears to be a significant decrease in confidence that final-salary schemes will provide a good income in retirement."

Greece courting Chinese tourism

Last Friday Tourism Minister Fani Palli-Petralia and her Chinese counterpart Shao Qiwei signed a tourism agreement marking closer cooperation between the two countries in the tourism sector, reports www.new-europe.info

China's bilateral assistance in the organising of the Olympic Games was a significant step towards closer ties between the two countries, as Greece hands over the Olympic torch to China for Beijing 2008. Within the framework of the new agreement, Greece will be the honoured country in the annual China International Travel Mart (CITM) tourism exhibition held in Shanghai in November.

ANA quoted Ms. Petralia as saying Greece can become a number one European destination for millions of Chinese tourists. ANA went on to point out that a Greek National Tourism Organisation (GNTO) office opened in Beijing a year ago providing detailed tourist guides written in Chinese and information on visits to Greece.

www.new-europe.info reports that Ms. Petralia also held a meeting with Air China General Director Ma Xu Lun, where agreement was reached on the need for direct flights between Greece and China. The airline management were then invited to visit Greece in August to discuss the option of chartered flights between the two countries.

China currently has the fastest growing economy in the world and a rapidly expanding middle class. This represents a huge tourism potential in the medium term as long-haul travel becomes more fashionable there.

Drivers ready for the road pricing crunch

Motorists’ growing dissatisfaction with the driving experience has crossed a tipping point with more than two-thirds (68%) now prepared to accept draconian measures to tackle congestion, new research reveals.

Over three-quarters of motorists perceive that congestion is getting steadily worse and support for road pricing to solve the problem has risen 6% in just two years, according to the 2006 RAC motoring report.

Nearly half of motorists (44%) support a road pricing scheme using precise telematics technology.

The research suggests that motorists are clear about the deal they want: 67% require a trade off on motoring tax; 63% expect investment in existing roads and 43% say improvements in public transport are crucial.

Telematics technology is also popular with motorists and extending its benefits to include other options such as in-car panic buttons could create a more positive reception for technology-led road pricing schemes.

The RAC thinks the time is ripe for government to offering financial trade-offs to motorists to make a persuasive case for road pricing. These should include:

Commit to improvements in public transport
Work more closely with employers to improve workplace travel plans
Lead the debate to mandate in-car technology and provide incentives to motorists to encourage take up
Debbie Hewitt, managing director RAC, commented: "Motorists are sending a clear signal to government that road pricing is a more palatable solution than it has been for the growing problem of congestion - but they are looking to strike a deal."

"Government must act now to seize this opportunity to win over road users. Motorists themselves are telling us that there is wide scope to gain their support but it is critical that policymakers adopt a fair basis for charging, review the impact on current motoring taxes and promote the technological benefits of a road pricing system for the idea to become a reality."

Doing a deal

Critics suggest road pricing simply extracts more money from motorists. Over two thirds of motorists reveal that a financial trade-off on the motoring tax burden is crucial for any scheme to get off the ground.

With global positioning systems likely to underpin any charging scheme, the report reveals that advanced technology presents an excellent opportunity for government in winning motorists round.

Road pricing would be received even more positively if the technology used also offered motorists a number of driver-friendly features. Anti-theft tracking is the most highly valued facility with 87% of motorists indicating they would like one. Other attractive features include re-routing gizmos to avoid hold-ups (80%), and a panic button that raises the alarm in an emergency (77%).

A full version of the report can be downloaded from www.racnews.co.uk.

Buyers pitch their offers low

After a red hot start to 2006, the housing market is set for a cooler period as confidence slipped for the first time in six months, according to research from a property portal.

The prediction comes as cash-strapped first-time buyers try to drive a hard bargain and property investors make their lowest offers. Buyer enthusiasm is cooling far faster than sellers’, said the report - signifying a slower market to come.

On average, house hunters have slashed their expectations for property prices over the next year from 7.7% in May to 4.3% in June, according to the report from Propertyfinder.com.

Over three-quarters (78%) of respondents expect the market to rise over the next twelve months, still a healthy proportion, but down from the 84% seen in May. This is the first such drop since December, said the report.

Buyers pitch their offers low

While asking prices may have been rising all year, buyers have begun to respond by demanding bigger discounts when making offers – an average of 6.1% below the asking price during June compared to 0.7% in March.

This is the lowest point in over 9 months. Those buying property for investment purposes are the toughest as they are driven by investment returns, not the emotional considerations of owner-occupiers.

Investors are making offers averaging 10% below the asking price. First time buyers are also driving a hard bargain offering 6.3% below the asking price, perhaps because they have the tightest budgets. Those who are moving home are more generous, offering on average 4% below the asking price.

Warren Bright, chief executive officer of propertyfinder.com said: "Buyers are clearly backing away from high asking prices. At the peak of the recent mini-boom, they were prepared to pay almost the full price, but the picture has changed rapidly."

"These figures show that asking prices are not a reliable guide of where the market is heading. As market conditions change, the prices actually paid can diverge significantly."

Buyers are trimming their optimism on the market more sharply than sellers are. This is a major indication of cooler market conditions to come. Back in May, buyers were significantly more optimistic than sellers which indicated a tight market as buyers were prepared to chase prices upwards. This has changed in June with the two groups much more closely aligned, suggesting a more balanced market.

"Fears over interest rates and stock market volatility may explain much of the cooling, but the World Cup effect should not be underestimated. The number of people looking for property on propertyfinder.com fell 35% during the latest England game,"Bright added.

Kids and building sites don’t mix

Construction sites are stimulating places to play, but they are not playgrounds and playing on them can have fatal consequences, warns the Health and Safety Executive as the summer holidays approach.

Parents, self builders and construction site workers all have a part to play in ensuring children stay away from building sites and surrounding land.

"Long summer evenings are a time for fun and adventure, unfortunately, all too often it can also be a time of tragedy", said Stephen Williams, chief inspector of construction at the Health and Safety Executive.

"Understandably some children are drawn to construction sites as exciting places to play, but they are not playgrounds and playing on them can have fatal consequences. Industry and parents need to work together to ensure children's safety."

Between 2001/02 and 2004/05, 3 children died and 235 were injured during construction works, in most cases simple precautions would have prevented the incidents ever happening.

A child swinging on a rope, hanging from a tree, on a construction site fell from the rope and landed on a metal bar sticking up from concrete. Workers on the site had noticed the rope; realised local children had used it as a swing for much of the summer, but had done nothing about it.

The following practical advice for parents and workers will help keep children safe this summer:

Warn children against playing in dangerous areas, including building sites
Make sure you know where your children are going, and when they will be back
Encourage them to play only in safe areas such as playgrounds
Workers should watch out for children playing around sites, if you see children, stop work and make sure they are off site before you begin again
Lay heavy objects on the ground or fix them firmly upright so they cannot fall onto children and injure them
Secure sites adequately when finishing work for the day
Never allow children to ride in construction plant machinery.

MPC voted 7-1 for interest rate hold

The current surge in house prices was not on the minds of the Bank of England’s Monetary Policy Committee when they met to fix interest rates for this month, though they did wonder where the money was coming from at a time when financial markets were not performing.

Members voted 7-1 in favour of holding rates at 4.5% based on inflationary developments being broadly in line with expectations and forecasts in the May inflation report.

The only deferring member of the committee was David Walton who wanted a rise in rates of 0.25%. This was the second month running he had voted this way over his concerns over rising inflationary pressures.

The most significant news since the May inflation report had related to developments in financial markets. If the recent appreciation of sterling and falls in equity prices were sustained, then the consequent impact on import prices and personal sector financial wealth would tend to reduce inflationary pressures, the minutes noted.

On the other hand the recent equity and commodity price falls had not been that large when set against the sharp price increases observed over the previous twelve months; and the sterling ERI had remained within the range it had occupied in recent years.

The falls in equity prices, if sustained, were likely to have a modest dampening effect on consumption growth, committee noted. Recent housing market data had been somewhat mixed; and the three-month growth rate of unsecured lending had continued to slow quite sharply. It was difficult to know how much weight to attach to this latter development. If the slowdown were related to a tightening in credit conditions by banks, it might have contributed to the slowdown in consumption growth in Q1. At the same time, however, the growth rate of households’ secured lending had remained strong.

It was possible that households were choosing to incorporate some of their unsecured debts into their secured borrowing, thereby lowering their cost of finance, the members thought.

The minutes are likely to boost expectations of an upward movement in rates, although analysts expect them to remain on hold for the time being.

The rain should not just go down the drain
The recent water management debate in the House of Lords was another reminder that the water-supply situation is in danger of undermining strategic development planning for the south-east of England.

Yet ironically, no single commentator has homed-in on the most straightforward and cost-effective way of tackling this problem – namely a return to the once-common practice of rainwater harvesting, points out the UK Rainwater Harvesting Association (UK-RHA) in the Green Building newsletter.

Modern rainwater harvesting systems (see our viewpoint feature this week) collect water that falls onto the roof of a property for subsequent use in non-potable applications, such as toilet flushing, clothes washing machines, car washing and garden watering. A domestic rainwater harvesting system can reduce mains-water consumption by around 50%.

Once widespread throughout the UK, such systems fell out of fashion with the introduction of mains water supplies. They are now experiencing a renaissance in this country which has seen a tripling of the market over the last two-years.

UK-RHA say systems are already in use on major housing developments around the UK, but do not seem to be featuring in debates surrounding the areas worst affected by water shortages. Where used, rainwater harvesting systems have been widely welcomed by Planning and Building Control Officers.

The systems are at their most cost-effective when used on commercial and public buildings where there is a combination of large roof area and a high consumption of non-drinking water. Washing of fleet vehicles for example, is a costly process that wastes the mains water which has been purified to a high standard. Using harvested rainwater instead makes excellent commercial and environmental sense.

Rainwater harvesting systems intercept water at the point of subsequent use; they do so without significant impact on the water that remains available to water-courses and aquifers. During heavy downpours, rainwater harvesting systems have an added benefit in helping to alleviate flood-risks by easing flows into the storm-water management grid.

UFOs seen all over Britain

Every year over half the UK population (60%) suffer unforeseen financial occurrences (UFOs), such as their boiler breaking down, which leaves a serious dent in their personal finances.

Yet only 20% of people are able to use their savings to pay for UFOs, new research from Lloyds TSB Personal Loans has found.

Over half of those surveyed estimated that they spend between £200 and £600 on UFOs annually, with one in ten saying they have had to fork out over £900.

The most common ways that people say they pay for UFOs are:

5 out of 10 use their credit card
2 out of 10 use their savings
1 in 10 have enough in their current account to cover the cost
1 in 10 resort to borrowing the money from their partner or family
To help customers manage annoying UFOs, Lloyds TSB now gives customers the option to ask for a one month break from making their loan repayments at a time that suits them.

Jason Nichols, Lloyds TSB consumer lending manager said: "It’s an unfortunate fact of life that every now and again we all suffer from unforeseen financial occurrences."

"When our customers experience a UFO they want the ability to be able to choose what is the best way for them to pay for it, taking into account their financial situation at that time."


"Our research shows 75% of our customers would like to have the option of a loan repayment holiday to help pay for UFOs and 69% say it would help them to manage their money better."

The most common UFOs are:

Between £1,000 and £2,000 for a new boiler
Up to £1,000 for unexpected car repairs
Circa £500 for emergency household repairs such as plumbing
Circa £500 to replace a TV and CD players that break
Anything from £100 to £1,000 on emergency dental treatment

Londoners don’t get the ‘right’ housing

A London Assembly report concludes that the type and mix of affordable housing being built does not match the needs of Londoners.

The report also criticises a lack of clarity in defining ‘affordable housing’ in borough development plans.

The report found there is a surplus of over 12,000 one-bedroom homes while there is a shortage of 28,000 homes that people actually need. Where developers are meeting targets, they may not be meeting local need. In order to meet their ‘affordable units’ targets, house-builders often supply only the smallest units, as they are the cheapest.

Tony Arbour, chairman of the assembly's planning and spatial development committee, said: "Too many Londoners are having to squeeze into unsuitable housing because it isn't being designed to meet the capital's needs."

"The provision of affordable housing for Londoners must recognise that, like the rest of the population, they will have families that need more than a one-bedroom flat."

Th e report calls for changes to the Mayor’s London Plan, his main strategic planning document, to better incentivise the building of homes with more bedrooms and more sophisticated methods of calculating necessary housing requirements.

Tony Arbour also criticises the use of the ‘affordable housing’ label, particularly when developers may label apartments at over £400,000 as ‘affordable’. "My personal view is that ‘affordable housing’ is a phrase that is increasingly seen as meaningless," said Arbour. "Greater clarity could be brought to the housing market if ‘affordable housing’ was better described as ‘subsidised housing’ provision."

Canny investors eye up German property

It's not only football fans who have their hopes pinned on Germany at present...

There are an increasing number of reports in the press at present of a 'buzz' around the German property market. This coincides neatly with the current football tournament being played there but is there any substance beyond this you may be asking yourself.

Because after all, the country's performance in the European property tables has been nothing to write home about for a long time. With low mortgage approvals and home ownership levels, German property prices have stagnated for over a decade. What's more, the recently published European Housing Review 2006 found, of those surveyed, that Germany was the only country where house prices had actually dropped.

But now major institutional investors such as Soros, Goldman Sachs and Blackstone are all jostling for position to snap up large swathes of German real estate. Do they know something we don't?

Changing fortunes

After some troubled times, the German economy is showing signs of gathering speed once again. The seasonally adjusted jobless rate in the country fell from 11.3 per cent to 11 per cent in April and market analysts such as JPMorgan Asset Management are highlighting the current healthy state of the finances of the country's companies and consumers.

The German construction sector has started to pick up and there are reports that the property market has now "bottomed out". If these prove to be true, then as one of the most affordable markets in Europe with tax levels and interest rates low, it's suddenly clear why canny investors are taking notice.

One for the hard-nosed investors

Unlike Spain, France and Italy, Germany has less appeal to the 'lifestyle investor' with less sunshine and beaches. But with strong rental yields of up to 10% in major cities such as Frankfurt and Berlin, it's certainly of interest to property buyers simply interested in pure investment goals.


Andrea Marie Portugal, marketing manager with investment agent Inmoinvest seems to think so. She told OPP magazine: "Germany will be the next big investment opportunity. With a sound economy and a tried and tested infrastructure Germany will produce significant capital appreciation over the next five years."

Talk of a German property boom is premature as yet. But with an increasing range of finance options, the advent of real estate investment trusts (REITs) and a strengthening German economy, it's certainly one to watch...

Scamster targets holiday property owners

An e-mail based scam from what seems to be a professional con-man is doing the rounds aimed at holiday property owners.

Many holiday property owners let out their property via third-party internet advertising firms and one such, Rentalsofspain.com is advising its property owners of a scam that’s starts as an enquiry from abroad.

The initial enquiry is fairly straightforward, although slightly tricky in that it purports to come from an agent who claims to have guests for the property. It asks for a ‘grand total’ price for the property for the weeks indicated.

After a while, this is followed by a confirmatory e-mail, thanking you for your assistance, saying he has taken payment from the guests and adding a rider that the guests need car hire from a specialist firm. He says he will send you credit card details that will cover the cost of the property and the car hire and asks that you deal with the total sum and send the balance of the money to the car hire firm.

Don’t do it!

Like all scams that ask you to collect money on somebody else’s behalf, you will be left out of pocket (and maybe your bank account details stolen as well) when the original payment does not materialise or is reversed by the bank.

These con-men are very clever, and no doubt there are further episodes to this story, but as the scam is going round right now, we at TheMoveChannel are warning to leave this enquiry alone from the start to avoid getting pulled in by the scamsters guile.

Homeowners make life easy for thieves

Homeowners are offering rich pickings to burglars this summer, according to a study by insurer Norwich Union.

According to them burglars are set to cash in to the tune of £750 million after careless British homeowners leave millions of keys lying around their homes.

With doors and windows being left open in the hot weather and homes sitting vacant during the holiday season, burglars could cash in on a one-stop-shop - stealing on average £2,405 worth of contents and cars per household.

The 2006 Cash for Keys report, compiled by Norwich Union Insurance, reveals 80% of Britons have up to five sets of keys in their home, with half (50%) of people keeping them all in one place. To make matters worse, one home in eight (12%) puts labels on keys, giving thieves a helping hand with clear directions for a fast hit.

Norwich Union Insurance has teamed up with ex-burglar, Bob Turney to gain an insight into the habits of UK burglars. Having spent 18 years honing his stealing skills before changing his ways to become a probation officer.

"The most obvious places to keep keys are the worst places, yet Britons continue to use them without much consideration for how easy they are making it for burglars," said Bob.

Eight out of 10 Brits (83%) give out spare sets of keys

A third give keys to their neighbours, thus setting burglars up for multiple hits on the same street

Nearly a quarter (22%) have handed out sets of house keys to people such as plumbers, electricians, gardeners, cleaners and babysitters and never got them back.

Despite government and police campaigns to encourage vigilance and prevent opportunist burglaries, many people don’t take the risk seriously.
Two out of five (40%) of Britons still think they will outwit thieves by hiding a spare set outside their house in case they lose their keys. Some women (6%) even admit to stashing keys in their rabbit’s hutch.

With improved security, car theft is now an increasingly tricky business so thieves are turning their attention to stealing vehicle keys from homes instead. If keys are kept within sight or reach of windows and doors, burglars use "smash and grab" tactics that take a matter of seconds. While the more discerning burglars go for the "hook and cane" method – fishing for keys through letterboxes or cat flaps with a hook or magnet attached to a stick.

Of course once they’ve got your car keys they can not only steal your wheels but load all your belongings into the back of your car and drive away!

This is exactly what happened to Tory MP for Monmouth, David Davies. Thieves broke into his home, stole the keys from the kitchen and then drove off in his car.

Celebrity homes have also been burgled specifically to steal keys to prestigious cars worth thousands of pounds.

England footballer, Frank Lampard was robbed of his Mercedes and Aston Martin last year which had a joint value of £195,000 and Boy band Blue’s Duncan James’ BMW, worth £44,000, was stolen when thieves broke into his family home and located the keys.

Last month, Arsenal’s Patrick Vieira and his family were gassed by burglars who then drove away with his £40,000 Mercedes and valuable jewellery.

To help Britons keep their homes and cars safe this summer, Bob Turney offers his insider advice and top tips:

Out of sight, out of mind – don’t leave valuables visible through windows and doors. Burglars are like magpies; if they see shiny things they won’t be able to resist snatching them!
Don’t key clump – don’t keep keys that unlock cars, sheds or neighbour’s homes on one fob

From handbag to house – if you keep your keys in your handbag, make sure there is no link to your address. If it’s stolen or lost, it makes easy pickings for thieves who will get their hands on a lot more than the contents of your handbag

Tool kit for stealing – if you have a shed or garage with gardening or DIY tools in, make sure it’s locked at all times. Burglars will look out for tools to help them in their task, so don’t make it easy for them

Cover your contents – burglaries are a sad fact of everyday life; take all the precautions you can to safeguard your home, including insurance from a reputable company. It will give you peace of mind that, in the event of a burglary, your belongings are covered.

Paul Redington, claims manager from Norwich Union, said: "The research findings have highlighted some pitfalls in home security allowing thieves to cash in on a jackpot of keys, that literally open the doors to cars, motorbikes, garages, safety deposit boxes and neighbours houses."

"Home owner should ensure all windows are shut when ever they leave their house. When on holiday, the house should be left secure and we would advise limiting the number of people who know your home will be left empty for this period of time. Most importantly, lock car and spare keys in a secure place during you holiday."

"We would urge people to review their home insurance policies to ensure they have sufficient cover in the event of a burglary, but if they take the advice of ex-burglar Bob Turney, they could prevent it happening in the first place."

Green crusaders welcome home energy rating

Details of the Hips energy rating certificate were announced by Housing Minister Yvette Cooper yesterday and green campaigners were among the first to show their approval.

The certificates will give home buyers and sellers A to G ratings for their home's energy efficiency and carbon emissions and form part of the government’s home information pack (Hip)

The energy ratings will be similar to consumer-friendly home appliance ratings and will have to be produced for every home bought and sold in England and Wales from next June as part of the Hip.

They will also show how home owners can improve the energy efficiency of their new home by improving their insulation, for example by installing double glazing, fitting loft or cavity wall insulation or investing in a condensing boiler. As many people plan to make improvements to houses just after purchase, this is a good time to provide such information.

Friends of the Earth climate campaigner Germana Canzi said, "Energy efficiency certificates will provide really useful information for house buyers and should provide a long-term incentive to taking action to save energy in the home. Poor insulation can mean families are spending hundreds of pounds heating the atmosphere - and contributing to climate change."

The World Wildlife Fund also welcomed yesterday’s announcement. Paul King, UK campaigns director of WWF, explained, "The introduction of the Energy Performance Certificate represents a very positive step forward. It means that for the first time people will be given the kind of user-friendly information they need to reduce both the environmental impact of their homes and their energy bills."

The energy certificate will be completed by home inspectors as they make out the home condition report and will take into account items such as loft and wall insulation, extent and type of double glazing and the type of central heating installed. Even simple to fit items like low energy bulbs will be taken into account said surveyors from RICS interviewed by the BBC.

Fear of yobs is Britains biggest fear by far

Britons are more than twice as likely to worry about anti-social behaviour than any other crime, a new report shows.

Almost one in four (23%) identified anti-social behaviour as their utmost safety concern. Of these 75% believe that the problem is on the increase, 46% have witnessed crime first hand and 16% consider they are a victim of crime.

Moreover, the fear of anti-social behaviour is common across the generations. Young people aged 18 to 29 (22%), parents with children living at home (21%) and retired people (22%) are all equally concerned about anti-social behaviour.

Over half (56%) of those surveyed have worried about crime in the last three months, almost half (47%) believing that anti-social behaviour is on the increase, and more than a third (37%) believing that crime in general is increasing.

Elaine Parkes, technical services manager at Legal & General said: "This research indicates a high level of apprehension across the UK population towards crime and personal safety, despite of the introduction of ASBOs and increased levels of policing."


"Advice on how to reduce the possible risk of crime and improve personal safety is available on the government crime reduction website and schemes such as Neighbourhood Watch, Crimestoppers and the government’s new crime helpline."


1 Anti-social behaviour in my area / yob culture 23%

2 Identity theft / fraud 9%

3 Personal safety as a result of violent crime 6%

4 Vandalism to my car 5%

5= Vandalism/graffiti in my neighbourhood 3%

5= Burglary 3%

8= Vandalism to my property 2%

8= Having bags stolen when out and about / pick pockets 2%

9= Car theft 1%

9= Crime abroad/whilst on holiday 1%

New homes set to rise 10%, builders say

Homebuilders expect to see over a 10% increase in the price of a new home over the next twelve months, according to a recent poll carried out by SmartNewHomes.com, suggesting a renewed confidence in the housing market.

The poll was carried out to gauge homebuilders’ opinions on the key issues impacting on the current housing market and found that 70% of respondents were predicting an increase in prices over the next year.

This optimistic forecast follows the steady increase in house prices since the start of 2006 and is a direct result of the increasing demand for new properties.

However, the findings also cite that homebuilders view affordability as the most important issue facing the new homes industry over the next year. As a result, the majority view the government’s competition for a £60k house as an excellent initiative for those who are struggling to get onto the property ladder.

David Bexon, managing director of SmartNewHomes.com, commented: "The poll has produced some interesting findings and offers a valuable insight into the market through the homebuilders’ eyes. Recent reports indicate that the housing market is recovering, and we hope to see a year of steady and sustainable growth ahead."

"I would advise buyers who may be struggling to afford a new property to consider the other alternatives on offer. One option is to consider shared equity; this is available from Housing Associations and some developers, and helps buyers to take the first step onto the property ladder."

Overseas mortgages prove their worth

Investors buying property overseas should take heed of recent currency exchange rate swings in the United States and Turkey, warns Assetz, and recognise the value of using overseas mortgages.

In the United States the value of the US dollar has fallen from $1.75 in April to $1.88 to £1 Sterling, which equates to about a 7% loss of capital for British investors who bought there for cash or remortgaged their UK home in order to buy, last year. However, those who took out an American mortgage will see the Sterling value of their debt falling by the same amount, reducing their loss to just 7% of their deposit.

Similarly, over the last month the value of Turkish Lira has fallen from approximately 236,000 to almost 300,000 Lira to £1 sterling. This severe currency shift means that those investors who purchased property up to March 2006 with Turkish Lira could now find themselves with a capital loss in the region of 20%. Mortgages are not currently available in Turkey but are expected to be announced imminently, and will no doubt be a popular choice with new investors who now find themselves with about 20% more buying power.

Stuart Law, Managing Director of Assetz comments: “Those looking to invest in the U.S. and Turkey can learn a valuable lesson in the benefit of using foreign mortgages in the country where they are buying. If both the property and its mortgage are priced in the same currency, this will minimise the risk to the investor from capital loss.

“Even if a local currency mortgage was used it should be noted that the deposit on the property would still be at risk, which reinforces the general overseas property investment trend to buy with minimum equity in Pounds Sterling.”

Although Turkish property appreciated by around 30% in 2005, the effect of the currency shift could severely reduce this gain if it feeds into property prices. While coastal Turkish property is priced in Euros, much of the rest is priced in Turkish Lira and those purchasers from last year or before could have lost around 20% in the last few months. Equally, buyers today paying in Turkish Lira will be getting 20% or so better value.

US house prices rose about 12% over the last 12 months and much of this gain would have been wiped out by the recent currency shift between US Dollars and Sterling. Investors buying in the US today are enjoying better value than those from a few months ago.

Stuart Law continues: “Currency shifts are not a reason to avoid investing abroad, but their effects upon investment returns certainly need to be better understood.”

World Cup ‘housing dip’ to reverse sharply

The housing market activity is set to rise sharply after the World Cup following a dip during the tournament, according to haart estate agents.

Although a dip in the number of housing transactions has been recorded during previous World Cups, this appears to have been short-lived and the housing market will bounce back, with property sales in August set to rise well above the average summer levels.

haart has analysed data on housing transactions before, during and after the tournament, stretching back 20 years from the World Cup year of 1986. That year, Mexico hosted the tournament and England reached the quarter finals.

Monthly housing transactions were 1,600 less in the June of World Cup years than others – a decrease of 1.3%. After the competition is over, however, the number soars, with an average increase of 4.1% in the August of those years than when no World Cup took place.

This pattern is also affected by how well England does. In 2002, when it reached the quarter-finals, transactions were down 5.1% in June but went up by 11.1% in August but in 1994, when England failed to qualify, levels fell by just 0.9% in June and rose by only 2.8% in August.

However, there are other factors that affect the impact the World Cup has on the housing market. In 1998, for example, when the housing market was strong, the number of transactions in June rose by 3.6%, while in 1990, when the market was on a downward turn, transactions fell by 5.7% and were still falling in August – by 5.9%.

Russell Jervis, managing director of haart, said: "It is well documented that the World Cup will impact on the economy as football fever grips the nation. Our research clearly shows that the housing market is no different, as the fixtures of the World Cup monopolise people’s time, and the important decisions that need to be thought through are put aside until it’s all over."

"However, as our research reveals the housing market is set to be very buoyant in the aftermath of the competition, as homeowners and buyers quickly resume their lives."


"With this in mind, potential buyers and sellers should consider entering the market now and being a step ahead of the post tournament rush, as it could be an excellent time to snap up a great deal amidst the football fever."

New buy-to-let lender on the block

Alliance & Leicester in near to launching sub-prime, near-prime, self-certification and buy-to-let mortgages through intermediaries, the bank announced yesterday.

The assets originated will be sold to Lehman Brothers under an agreement. The bank confirmed this in its 2006 Pre-Close announcement to the City yesterday.

Mehrdad Yousefi, head of intermediary mortgages said: "We are very excited to be nearing our launch into specialist markets where we aim to bring additional choice and competition with market-leading mortgages."

"We are delighted that we will be able to provide a wider range of deals to suit the changing needs of borrowers. By working closely with mortgage intermediaries we can offer a ‘one stop shop’ for all clients’ needs."

Alliance & Leicester will also continue to focus on the prime residential mortgage market building on its success which is evident in a strong set of results in the Pre-Close where gross mortgage lending was up to £3.2 billion with net lending up to £1.4 billion for the first quarter of 2006.

A&L has traditionally been one of the most cautious mortgage lenders, but said it would enter the market "in a prudent and responsible manner", targeting those with sizeable deposits.

Parents reverse the ‘empty nest’ syndrome

Parents are coming back to live with their children in a reverse of the tradition of ‘empty nesters’ living on their own after the family has gone.

Research from retirement housing and finance specialist Economic Lifestyle shows that more than 858,000 adults aged between 35 and 64 now have one or both of their parents living in their home.

And it’s a phenomenon the firm has dubbed "3G" families – short for three generations living under the same roof. The financial squeeze faced by the over-65s struggling to maintain a home on low incomes is forcing more to live with their children, Economic Lifestyle believes.

Rising council tax and heating bills on top of home maintenance costs plus the possibility that over-65s are suffering from failing health makes it more convenient for them to live with their families, the firm adds.

Currently four per cent of households with adults aged between 35 and 64 have their parents living with them. Households in the North of England and London are most likely to have parents living with them – some eight per cent and seven per cent respectively.

Families in the West Midlands and the South West of England are least likely to have elderly parents living with them – just two per cent and three per cent respectively, the research shows.

Mark Neal, Managing Director of Economic Lifestyle, said: "Retired people struggle by on average incomes of around £11,000 and many are even still paying off mortgages. Around one in five pensioners live below the poverty line."

"Financially it makes sense for them to go back to live with their adult children who may be reasonably well-off and able to help them just as they were supported by their parents while they were growing up."

"However it is the case that three generations of a family living under the same roof can lead to tensions. Many families will be happy to have their parents come to live with them but for others it is an arrangement forced on them by financial necessity."

Those aged 35-44 are most likely to have their parents living with them – in fact, there are more 3G families in this category than all the others combined.

As the age of the homeowner rises the proportion of those living with their parents fall. However the research shows 148,000 adults aged between 55 and 64 have one or both their parents living with them.

Families who find themselves forced by financial necessity to live together can look for alternatives that will be affordable and can ease potential clashes.

Economic Lifestyle offers homeowners aged 65 and over a number of options for releasing some of the equity in their homes or to live in a property that they would not normally be able to afford. These include:

Life Interest Plans

The Life Interest Plan, a unique reversion scheme, allows people over the age of 65 to buy a home designed for retirement living at a fraction of its true value by selling their existing property then using part of the equity to buy a Life Interest in an Economic Lifestyle property. The retirement property then becomes their legal home for the rest of their and their partner’s life allowing them to make the most of their retirement years with the remaining equity.

Find & Afford Plans

The Find and Afford Plan enables people to find a property that they want and Economic Lifestyle will buy it and lease it to them at a cost that is greatly below its market price. The property reverts back to the company on the passing away of the customer/s. It is also possible to opt for a part find and afford which allows them to release capital but also leave part of the property value to their estate.

Cash Release Plans

Perfect for those aged 65 and over who wish to remain living in their current home and release capital at the same time. The property is valued by a qualified surveyor, and after formal acceptance, the tax-free funds are transferred within 10-12 weeks, including a full refund of the valuation fee. There are no restrictions on how the money should be spent.

Home Exchange Plans

For people taking out the Life Interest Plan or using the Find and Afford Plan, Economic Lifestyle can arrange a cash sale of their current home. This enables the retired homeowner to eliminate chains, stress, unwanted visitors and estate agents fees. Two free independent valuations are arranged from which the average is taken and an offer is made.

Getting independent financial and legal advice before taking out an equity release plan is recommended by both the charity Age Concern and the Financial Services Authority, the UK's chief financial watchdog. For details of local IFAs who can advise you on a wide range of financial services, call the IFA Promotion free phone Hotline on 0800 085 3250

Retirement homebuilder in massive buy-out?

Earlier this month retirement home builder McCarthy & Stone revealed in a statement to the stock exchange that it had received approaches that "may or may not result in an offer for the company."

Now it appears the billionaire Reuben brothers have emerged as the frontrunners to buy the retirement homes group for £1billion.

Permira, the private equity firm, is also understood to have approached McCarthy and is being advised by Citigroup on its advances. The Times of London reported that investment firm Augusta Capital hopes to push aside private-equity group Permira with the record-breaking bid for the firm.

If the deal is successful, it will beat the previous largest house building takeover - the £634 million acquisition of Westbury by Persimmon.

It is believed that Augusta is working in partnership with HBOS, the bank, on the deal.

Keith Lovelock, McCarthy & Stone's chairman, is thought to have provided information about the company's finances to both Permira and Augusta Capital, the Telegraph reported.

McCarthy builds about 60% of retirement homes in Britain and is seen as an increasingly attractive business because Britain's ageing population boosts demand for retirement homes.

Great British invasion of France is a myth

Britons landing in large numbers on French soil and pushing up house prices has long been a complaint of locals in some parts of the country.

However, the accusations are unfounded says Daisy Ayliffe, writing for Expatica. Sure, she says, there is no shortage of Britons who don’t want to live in popular regions of France such as the Dordogne. But the ‘expat land grab’ is a myth.

"Brits out, stop speculation" was earlier this year daubed on the offices of a notary in Bourbriac who handles house purchases for UK buyers. The British press was quick to dub the town where the incident occurred as the 'village of hate'.

But the fact is the local house hunters are too quick to find a scapegoat for the soaring house prices. And not just in Brittany either.

For 20 years average prices across France have risen by around 5% but in recent years growth has exceeded this and 2004 saw average growth of 15%, followed by 10.9% last year.

With French estate agents reporting there is no habitable rural building left to buy for less than Eur 100,000 and analysts predicting up to 11% growth for this year it’s no wonder the finger of blame is being waved at second home buyers.

But Britons are not to blame, says Claudia Carrier-Hein, estate agent for Demeures et Propriétés du Sud Ouest. "British buyers all seem to be after homes near La Rochelle but it is the local families who are paying the price," she contests.

"British people are not stupid, they do not buy over priced houses. When I began working as an estate agent I was told Brits suffer 'coup de coeurs,' that they fall in love with properties and pay any price — but that is simply not the case," she notes

British families have been specialising in finding and rebuilding run down properties that others would not buy.

"British people have always tended to buy old ruins that no one wanted and they have added real value to them. It is not the case that a whole market shift can be attributed to Brits who pay above the odds for homes over here, " said Carrier-Hein.

Other varieties of expat buyers have arrived in much smaller numbers but, according to estate agents, are actually more likely to overbid for a property.

"The big price properties are not actually being bought by the English," Jean-Alain Corfa of Kermorvan Immobiliers in Brittany adds. "It is actually other nationalities who go for the top end of the market. I have many Swiss, Dutch, Japanese and American clients."

The housing boom that started in the 1990s—and which has only slowed but not stopped even today—is of course, not limited to France. Never before have so many countries experienced housing market ramp-ups at the same time.

The International Monetary Fund (IMF) say the strength, duration and ubiquity of the global boom is underpinned primarily by low interest rates.

As well as stable interest rates, the French government has encouraged investment in property with various schemes of which the leaseback is one. Government-run programmes have attracted larger numbers of French buyers into the market as well as foreign buyers.

Leaseback properties were introduced to increase the quantity of holiday accommodation in areas capable of attracting more tourists.

"The leaseback system is a scheme unique to France which enables you to afford your dream home and cover a lot or all of the mortgage repayments," Miranda John, international mortgage broker at Blevins Frank says.

"You will receive a guaranteed rental income, averaging between 3% and 6%, from a large holiday company who will rent out your property for 9 years, sometimes more. The other main advantage of this scheme is that when you originally buy your property, you don't have to pay VAT which represents a 19.6% saving."

Of course, Britons and expats from other counties too are participating in the phenomenon, aided by increased accessibility offered by low-cost airlines and airports.

New airports in Nîmes, Carcassonne and Toulouse have had an immediate impact on house prices in the area. "Our market report for 2006 points to a 21 percent increase in property prices close to low-cost airports," Trisha Mason of Vivre en France says.

The British love affair with France has not had only negative economic consequences, as tax officials in the Dordogne—which now runs English-language tax seminars—can attest.

"The French want tourists but they do not want any of the inevitable consequences," Carrier-Hein, argues. "UK buyers have propped up the local economy in rural areas of France. Brits tend to buy old properties and renovate them and that means using local French builders and architects. Britons are good for France’s rural economy. France cannot have its cake and eat it."

Bulgarian tourist industry unites

A Bulgarian tourist industry union was formed in Sofia on Tuesday June 6 in the National Palace of Culture.

Members of the new organisation include the three major structures in the sector – the Bulgarian Tourist Chamber (BTC), the Bulgarian Hotel and Restaurant Association (BHRA) and the Bulgarian Association of Travel Agents (BATA),

Discord in the country’s tourist industry has prompted calls for a union of interests on previous occasions, resulting in a national tourist board being set up in May. Now, the state agency for Ttourism head Mario al-Djebouri called for the organisations to merge. He added that the problems in the sector could be solved only if the industry was united.

The group elected a 17-member management board and a control council of seven. Petya Slavova, owner of Festa Holding, was appointed chair of the board.

The union's first order of business was to urge Bulgaria's lawmakers to introduce a preferential 7% VAT on tourist services both for foreign and local tourists. The declaration was sent to President Georgi Purvanov, Prime Minister Sergei Stanishev and the National Assembly.

Slavova said that she was happy to see all tourist organisations enter the new union, along many private hotel owners. She explained that the state's involvement in tourism was crucial, especially when it came to tax policies and development strategies.

Students not at home with ‘fly the nest’ plans
Many students planning to start university this year will be continuing to live at home with Mum and Dad even though their parents would prefer them to fly the nest.

Up to a fifth of students will be living at home this year, a report from Lloyds TSB shows. Money worries were the main reason students cited, but that’s not the whole story.

Of the students surveyed, over a third (35%) said that if they didn’t live at home, it would be too expensive for them to go to university. Two fifths (38%) admitted that while it would be possible to leave home, they would need to take on additional debt to do so.

Nearly three quarters (73%) of parents surveyed confessed that if money wasn’t an issue, they would want their offspring to move out of home when they go to university in order for them to gain independence.

In contrast, two fifths (42%) of young people admitted that living at home was ‘an easy life’ and even if they could afford to move out, they’d choose to stay put.

Students who are intending to live away from home said making the money stretch is a concern. However, more than half (58%) think the independence they’d get is worth the extra financial burden while nearly a third (32%) said that they can’t stay at home as the university they have chosen is too far away.

Only one in ten have no concerns about the additional debts that living away from home will bring.

The main reasons students gave for leaving home were:

To be close to the university campus - cited by over three quarters (77%)
To gain independence - mentioned by 72%
Three fifths (60%) are attracted by the social aspects of living away from home
Nearly a quarter (23%) admit that they wanted to escape their parents’ clutches.
Nearly half (48%) of students said they plan to live in university halls of residence while 44% intend to live in a shared house.

Family therapist Phillip Hodson, said: "Going to college used to be the time when children left home. Both sides welcomed the end of domestic and territorial overcrowding. Parents could re-decorate their messed-up living space; children could become adults forced to make their own decisions."

"But, where once students had grants, now they face debts and one in five of them will continue to live at home largely for reasons of cash.

"The psychological consequences of staying at home may be severe. Stay-at-home youngsters tend to remain adolescent with damaged powers of personal decision-making. Indeed, some of them – especially boys – get stuck at home until they are 30 or older partly because they have not managed this crucial break at 18."

"They may well believe: "the living is easy" but only because their parents continue to cook, wash up and pay the bills. The catch is that young people are the ones being deprived of survival life skills."

Marcus Banks Lloyds TSB student banking said: "With student debts escalating, living at home could seem like an easy way to save money. But for many, going to university isn’t just about getting a degree – it’s also about learning to live an independent life."

"Before making a final decision about whether to move out, it’s worth thinking carefully about all the financial help available and weighing up the pros and cons."

Estate agents make poor car drivers

Estate Agents come top of the list of motorists with the worst accident records - closely followed by community nurses, chefs and doctors, according to new research.

Churchill Car Insurance has analysed its claims data and found a significant difference between certain professions and the likelihood of having a car accident.

In contrast with estate agents, farmers make the least number of car insurance claims and are half as likely to have an accident than estate agents are. In Churchill’s experience, this is because they live and work in rural areas with less congestion, which are more tranquil to work in than the stressful office environment.

The data also shows that ambulance drivers make fewer claims - they drive frequently and are therefore used to all types of road conditions, so are more confident drivers.

Darren McCauley, head of car insurance at Churchill said: "The poorer claims experience associated with doctors and community nurses most likely reflects the long hours they work in a very stressful job. As a result, they are more likely to be tired when driving and possibly distracted. Conversely, those who have jobs which involve working outdoors or drive for a living tend to have fewer accidents."

"Estate agents make lots of journeys in their cars during the day – dashing to see clients in urban areas and often parking wherever they can when they arrive."

Landlords continue to invest in the market

Property prices rose by nearly 2% in April as landlords continue to invest in the market, according to the latest buy-to-let index from specialist lender Paragon Mortgages.

Cancelling out the dip in March, the rise in April has contributed to a 4.7% house price increase over the past six months. Nationally, homes were 7.62% higher than in April 2005.

However, rising property prices are encouraging rather than deterring investors. John Heron, Paragon Mortgages' managing director, explained: "In all parts of the country, upbeat landlords are buying properties at higher prices, secure in the knowledge that there is good tenant demand out there for the right property in the right place."

"We are seeing good investor activity in many northern cities, as they purchase to meet the accommodation needs of all categories of tenant - students, key workers, families on benefit, and young professionals."

"For the most part, existing landlords are adding to their portfolios, and there are not so many first time landlords. It is perhaps no coincidence that real estate investment is popular at a time of uncertainty in the equity markets."

Average rental income rose by £31 (or 0.3%) from £10,082 in March to £10,113 in April, despite which, rental yields fell from 6.26% to 6.16%.

The latest figures indicate that rental figures have stabilised. April rents were at the same level as six months previously, October 2005.

Looking ahead, Mr Heron predicts a buoyant market as landlords continue to invest: "The positive trend looks set to continue - in our latest landlord survey, investors said that they expected to expand their portfolios in terms of both property numbers and value by 5.6% over the next 12 months."

China reins in luxury property boom

China has ratcheted up its campaign to cool the booming property market by stopping land sales for villas and other luxury housing projects.

The government said the move was also designed to help protect the nation's dwindling reserves of farmland.

Authorities across the nation will now have to screen projects for violations of the new land-use regulations, Wang Shiyuan, vice minister of land and resources, told a news conference in Beijing on May 31.

Local land resource bodies must give priority to developers of moderately sized and priced apartments - those that average wage earners can afford, Wang said. Local governments must also publish land sales records to ensure transparency, he said.

And China's Central Bank will tighten scrutiny on lending to limit "excessive investment and loans growth," the state news agency Xinhua said. From this week, measures come into force forcing homebuyers to increase down-payments from 20% to 30% and forcing a 5.5% tax on homes sold within five years.

A day before the news conference, China issued an emergency order urging local authorities to exercise more caution in considering applications for developing land for non-agricultural projects.

China lost more than 122 million hectares of farmland last year to construction projects and natural forces such as erosion.

"The country cannot afford the construction of large villas to meet the demand of a few high-end customers while sacrificing the interests of the majority," said the vice-director of China's Land Ministry, Shu Kexin.

Landlords in identity theft threat

Landlords and buy-to-let property owners are one of the groups most at risk from identity theft, according to the latest UK Victims of Fraud data released by CreditExpert.co.uk, the credit monitoring service from Experian.

Tenant Fraud
As the spring property-buying season gets underway and the cost of the average UK house rises another 2% prospective buy-to-let owners are urged to take care to protect their good credit report from their new tenants.

Nearly half of identity fraud victims who knew the person that had used their identity were landlords. The risk is exacerbated for landlords renting out property they have previously lived in, as over four in ten (41%) cases of identity fraud are previous address fraud.

In some cases, fraudulent tenants have used the landlord’s name and the rented property’s address to apply for credit, such as credit cards, loans or even just mail-order goods, in the landlord’s name.

Tenants have also intercepted mail addressed to their landlord and used personal details enclosed in the mail to open fraudulent credit accounts.

In both scenarios, the credit application is logged on the landlord’s credit report and bills of thousands of pounds can be run up in the landlord’s name, seriously affecting his or her future borrowing power.

Re-Direct Your Post
People who change addresses frequently are also at risk from fraudsters. Almost half (43%) of identity theft cases in the UK have occurred at a previous address and one in four people (24%) fail to re-direct their post when moving home.

Beware Fraudster Flatmates
It’s not just landlords who should beware of the identity-stealing tenants. People who have shared mail-boxes should also take steps to protect themselves from potential fraudsters.

Post can be easily intercepted from shared mail-boxes and an identity fraudster could use some of the victim’s details to open a new credit account online or over the phone, use the document as ID when making a credit application, or use the details to access an existing credit account.

Top five tips for buy-to-let owners
CreditExpert.co.uk advises buy-to-let property owners to follow these simple steps to protect their identities:

Contact the Post Office to re-direct your post. Even if you think you haven’t given your investment property’s address to anyone, this will ensure any post addressed to you isn’t delivered there.

This is even more imperative if you have lived in the property before letting it out.

Carry out comprehensive checks before signing a contract with a new tenant (see www.tenantverifer.com.) and ensure you have references from their previous landlords.

Register with the Mailing Preference Service to have your name taken off most of the direct mailing lists in the UK at the rented property. This will ensure mail-shots from lenders and direct marketing credit application forms aren’t sent addressed to you at your tenant’s address.

Fit secure, individual mail-boxes for your tenants if it’s a shared property. This will give your tenants piece of mind.

Monitor your credit report. Sign-up to a credit monitoring service that enables you to see if anyone has fraudulently applied for credit in your name.

Jim Hodgkins, managing director of CreditExpert.co.uk, comments: "Purchasing a buy-to-let property is an increasingly popular investment. When considering this type of investment, people should be wary of the possibility of dishonest tenants taking advantage of your good credit score and credit report to incur debts in your name."

"If you are concerned that you could be at risk from identity theft, a credit monitoring service will alert you to any significant changes to your credit report, so you can take any necessary action as soon as possible."

Demand for private rented housing to soar

Demand for private rented housing is set to rise by 600,000 households by 2021, a new report shows. And in order to meet this demand, new investment of over £100 billion will be required.

"Demographic changes are the primary driver of future demand for rented housing," comments the report author Richard Donnell, director of research at Hometrack. However, the report highlights three main factors that may result in the scale of demand exceeding this central projection.

Unaffordable House Prices
Donnell calculates that 69% of private renters cannot afford to access ‘entry level’ owner-occupier housing (i.e. cannot afford to buy a house at the lower quartile house price). This group includes the 22% of private tenants who are in receipt of housing benefit.

"If house prices continue to remain relatively high then more households will fall into this affordability trap, increasing rental demand yet further," comments Donnell.

Net Migration
The rental market feels much of the initial impact of in-migration. The latest household projections assume net migration of +130,000 people per annum. However, over the last 5 years net migration has been running in excess of 200,000 per year, particularly from the EU. If future levels of migration remain strong then the impact will be felt most immediately in the private rented sector.

Changes in attitudes towards renting as a desirable tenure choice

Short term aspirations towards homeownership within the younger age groups have reduced over recent years, according to the Council of Mortgage Lenders. There is also some evidence that young households are seeing the benefits of renting as a tenure choice. If we are to see even a modest a change in the propensity of households towards renting then the scale of demand for rented accommodation would increase further.

The report highlights that the bulk of demand is likely to originate from the ‘mid-market’ and ‘affordable’ segments that account for the majority of demand today. These two groups contain households who are either unable to access the owner occupied market or are consciously delaying entry into the owner occupied sector until they are ready to do so.

At the other end of the demand spectrum there is a significant amount of ‘displaced’ demand from those in housing need who are unable to access housing in the social rented sector. The scale of future demand from this group will largely depend upon policies to expand the supply of affordable housing, primarily the supply of low cost housing, but also social rented housing.

The scale of potential demand highlighted by the Hometrack research will only be realised if the supply of rented housing expands. Despite the major injection of new finance into the private rented sector over recent years, primarily via buy to let mortgages, the supply of rented housing in the UK remains low by international standards.

Donnell commented: "A small rented sector limits job mobility and the development of a dynamic workforce."

"The private rented sector has an important role to play in providing balance to local housing markets. It is certainly delivering much needed supply to those who are currently unable to access the owner occupied sector."

"Yet the scale of investment required can only realistically be delivered via institutional funds. The arrival of Real Estate Investment Trusts (REITs) will provide an important conduit for new investment but we are unlikely to see the required growth in stock without measures to help stimulate the supply of rented housing".