PRESS DIGEST - Financial Times - Oct 27

The Financial Times

NEW HOMES NEEDED IN DEAREST REGIONS

The National Housing and Planning Advice Unit, a government agency advising on affordability, has warned house prices in the south and east of England are on course to overtake those in London because of a shortage of new homes. The organisation made the statement in response to government plans drawn up in July to increase annual housebuilding from 200,000 to 240,000 new homes by 2016. The quango chairman, Stephen Nickell, said that to have the largest impact on affordability, you have to build houses in the most expensive areas because that's where the jobs are and that's where people want to live.

DEBT ADVISERS WARN OF SHARP RISE IN REPOSSESSIONS

The Citizens Advice Bureau has said borrowers with subprime mortgages are finding it increasingly difficult to service their debt, raising fears there could be an increase in the number of repossessions in 2008. The CAB has said significantly more people have been in touch with the organisation to discuss problems related to subprime mortgage arrears, adding the vast majority of cases were initiating repossession proceedings.

PROPERTY TRUST INVESTORS HUNKER DOWN FOR THE LONG TERM

The Bank of England's statement there are growing risks to the commercial property sector is thought to have come as a blow to private investors in real estate investment trusts, who have seen the value of their stakes fall by up to 30 percent so far this year. Mike Prew, a property analyst at Lehman Brothers, has said people haven't just taken a red pen to valuations, they have taken a red paint brush, adding there has been a major pricing adjustment happening in the sector. However, analysts have started to see light at the end of the tunnel, and most private investors are holding on to their shares.

SUPERMARKET SHAKE-UP SEEN

Leading supermarkets are thought to be preparing themselves for a shake-up on rules regarding suppliers, planning and local market share, as part of a long-awaited investigation that will be published in the next few days by the Competition Commission. Tesco (TSCO.L: Quote, Profile, Research, Stock Buzz) and other retailers have already been fighting a rearguard action to prevent radical change, as they are under the impression the commission will respond to complaints about prices that are being paid to farmers and the supermarket's accumulation of "banks" of unused land.