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Commentators say that Government targets to build 2M new homes over the next eight years are increasingly unrealistic Firms going bust in an economic downturn is hardly surprising. But the bankruptcy of the UK's largest and most high-profile buy-to-let seminar operator showed the depth of problems in the housing market. Inside Track, which advised aggressive buy-to-let strategies to would-be landlords and property speculators, admitted it was the latest victim of the credit crunch. Receivers said the drop in value and a glut of unsold new-builds had been a critical factor. Barely a week before, Persimmon – the UK's biggest housebuilder – announced it was shelving plans to develop new sites. The company also predicted the Government's target of building two million new homes over the next eight years would not be met. James Rowlands, spokesman for the Royal Institute of Chartered Surveyors, said: ‘In the current climate, these targets are looking more and more unrealistic.' Despite the bad news, local authorities have been rolling out schemes to help new buyers get on the property ladder. In Scotland, deputy first minister, Nicola Sturgeon, announced a £25m scheme in Livingston which, she said, would ‘kick-start a new generation of council house building'. The authority will build 700 homes to rent and more authorities are expected to follow, but they will be a mixed programme of developments rather than a return to the large-scale developments of the 1950s. In London,Islington LBC announced two weeks ago that tenants wishing to buy a share of their property would be eligible for up to £4,000 to help them cover fees and costs. The Social HomeBuy Grant could cover solicitors fees and go towards stamp duty – giving a helping hand to many wanting to invest in their own home. Tenants who might otherwise have overstretched themselves with a full right-to-buy purchase can buy with far less risk of being repossessed. The council can also invest the receipt from these sales back into social housing in Islington. A council spokesman said Islington remained a hugely-popular place to live. But house-price inflation had left council tenants who wanted to buy unable to move into home ownership in the borough where they lived. In the same week, City of York Council announced a £14m social housing grant to enable the building of 365 affordable homes in the city. Head of housing, Steve Waddington, said: ‘This is good news for the city. The proposed developments will help in meeting the needs of the city for affordable housing and ensure this type of housing is delivered.' In the same week, West Lancashire DC announced it was stepping up publicity of the Ownhome scheme, run by Places for People and the Co-operative Bank, to attract first-time buyers. Aimed at people on low incomes, the scheme consists of a loan worth up to 40% of the property with no interest to pay for five years and a mortgage. The council is using staff to tell local people friends, family and even estate agents. Executive housing manager, Bob Livermore, highlighted how councils could make a difference. He said: ‘House prices have risen dramatically in recent years and this scheme means many people who have difficulty in finding a home can now afford to buy. The scheme is not run by the council, but it might help people in our area.' Crime Pays: Planning officers beware A collapsing property market benefits criminals, particularly drug dealers, looking to launder money. With falling prices and mortgage criteria tightening, legitimate developers will be glad to deal with cash buyers, particularly those who purchase off-plan before the development is completed. It's not new. Proceeds from the infamous Brinks Matt robbery were invested in London Docklands developments. What is new is the 2002 Proceeds of Crime Act, which enables the prosecution of anyone who knowingly or negligently enables money laundering. The penalty is a heavy fine or jail of up to five years. Here's how it works: a property is bought and then resold to the same person using a different identity – a ‘straw buyer' - for a higher price or, it is bought with a mortgage which is then paid off in cash. The mortgage papers or property deeds offer proof of where money came from Or, a criminal sets up a property company to maximise return.

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How councils are battling the ailing housing market

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