Housing, energy prices, current accounts and spending

The housing market is ‘broken’, ministers have conceded, as they unveiled the Government’s revised housing strategy. Under the plans, councils will be ordered to build thousands more homes, with an emphasis on high-rise blocks and city centre developments, The Guardian reports. The Government believes that too few councils have plans to meet England’s housing demand. It says that two fifths of local planning authorities lack an adequate plan for building new homes to keep pace with demand. Ministers say a minimum of 250,000 new homes are needed each year. New centralised standards will be set for local councils to project their future housing needs, with the expectation that the plans will be reviewed every five years. However, it is unclear how councils will afford all this. Meanwhile, ThisisMoney reports that house prices dropped by almost £2,000 on average in January. According to the Halifax House Price Index, property values fell for the first time since the middle of last year. The monthly decline of 0.9 per cent put the cost of the average home at £220,260.

Energy

Some good news for people with prepayment energy meters this morning as after Ofgem announced a temporary price cap, due to come into effect in April. It is estimated that four million customers on prepayment energy meters will save around £80 a year. The BBC reports that it will be updated every six months and is expected to stay until 2020.

Current accounts

While consumers are wising up to the benefits of changing bank account, few then continue to look for the best deals once they have made that first switch. Research carried out by comparethemarket.com found that of those current account holders who had ever switched bank account, only 41 per cent had gone on to switch a second time or more, with the majority (59 per cent) switching and then switching off.

Of those who had changed current account at least once, 39 per cent did so in order to take advantage of better benefits and rewards from other providers, 29 per cent switched in search of higher interest rates and 28 per cent said they were looking for better customer service from their bank. When asked about the switching process, 67 per cent said that they found it easy and 44 per cent said it went without a hitch.

HBOS

MPs have accused HBOS of repeatedly failing to deal with fraud perpetrated on small businesses, The Times reports, leading to calls for owner Lloyds to pay compensation to victims. The paper said: ‘The bank is at the centre of an intensifying storm after it emerged that complaints about the activities of a group of insiders and consultants centred around HBOS’s Reading business were raised with the management in 2007, and then with Lloyds after it bought HBOS in 2008.’ Economy The Guardian reports that the Government is on track to ‘impose steep cuts in public spending from April and increase taxes by the end of the decade to their highest level as a share of national income since 1986–87 to combat the UK’s persistent budget deficit’. A report by the Institute for Fiscal Studies says that slower economic growth following the vote to leave the EU means the Government must find £40 billion to eliminate the budget deficit in the next parliament. Spending

Consumer spending continued its bull run in January, growing by 4.4 per cent year on year, as inflationary pressures led to more being spent on petrol and in supermarkets.

Data from Barclaycard, which processes nearly half of the nation’s credit and debit card transactions, shows that after a lull in December, double digit growth in petrol spending (15.3 per cent) and the highest growth in supermarket spending in two years (2.9 per cent) fuelled a strong start to the year by consumers.

This drove up spending on ‘essential’ items by 5.8 per cent, the highest level since Barclaycard started reporting on consumer spending in 2012. In-store spending was also boosted as a result, to 1 per cent, a reversal of the 0.3 per cent contraction recorded in December.