Legal News

The former chairman of the Financial Services Authority – now known as the Financial Conduct Authority – has warned that escalating property prices could lead to instability in the property sector in London.

Lord Turner said that the pace at which property prices are rising in the capital could lead to an unstable market. Lord Turner told BBC News:

“If we have an environment where there is a continual increase of the amount of mortgage borrowing against property prices – which go up in price because of the mortgage borrowing, and then you borrow more because property prices have gone up – you have got a sort of escalator machine.”

He added that the government’s Help-to-Buy scheme to help first-time buyers get on the property ladder and assist homeowners to buy a better home might also encourage more borrowing as buyers struggled to afford their own homes.

Prince Charles has warned this week that spiralling property prices were making it more difficult for homebuyers to find a property they could afford.

Head of the Office for Budget Responsibility Robert Chote has also warned that escalating property prices might result in a property bubble, with properties being bought as investments rather than as homes.

House prices in London have seen some of the biggest increases across the country, with experts warning that overseas investors from Russia may continue to pile money into the property market, given the political situation in Russia and the Ukraine.

It is estimated more than 250,000 affordable homes need to be built annually to keep pace with the demand for housing across the UK.

A survey by the London Child Poverty Alliance has found that nine out of 10 people in London want action by local politicians to make housing more affordable in the capital – as well as improving the quality of housing stock.

Housing is being marked out as one of the main battlegrounds for local politicians in the local elections to be held in May.

The director of research for the London Child Poverty Alliance survey, Patrick Briône, said:

“Whichever party can show it understands the urgency of this crisis facing Londoners and is prepared to take up the challenge could pick up tens of thousands of extra votes this May.”

Escalating house prices are also creating higher rents for tenants due to a shortage in affordable rental properties – and many rental tenants are currently living in disrepair as a result of failures on the part of landlords to maintain properties.

Research for Shelter published in November found that some rental tenants pay for repairs to their rented homes themselves rather than risk a confrontation with their landlord and possible eviction if they complain.

Shelter also found that in the southwest of the country, more families are renting properties rather than buying their own homes – and many families are living in damp and squalid conditions as a result of landlords not carrying out repairs to the properties they rent out.

Duncan Lewis Housing Solicitors

Duncan Lewis housing solicitors can advise on housing law including:

• Debt
• Disrepair of rental property
• Housing benefit
• Housing possession
• Landlord & Tenant
• Local Authority housing
• Mortgage repossession
• Unlawful eviction.

Duncan Lewis is also a leading firm of Legal Aid solicitors.

For expert advice on housing law, contact Duncan Lewis housing solicitors on 020 7923 4020.