Saturday, September 10, 2022

Dear Mr Clarke

No, this is not a typo. Simon Clarke has been appointed Secretary of State for Levelling up, Housing and Communities, taking over from Greg Clark to whom the previous blog was addressed. This game of musical chairs says a lot about our system of government; the prime minister rewards her friends with jobs and cabinet membership even if the current post holder might have years' of experience and has not done anythng wrong. Clark's predecessor, Mr Jenrick was retained by PM Johnson even though he had made serious errors of judgement. Three points of interest; the increase of housesharing by the over 50s, the problems with equity share, and the effect of the cost of energy/living on the salability of houses. The housing squeeze is making it hard for those without equity to move into the housing market. There are significant number of older people who are having to share houses in order to afford rent. What is normal for students is less acceptable to the more elderly and sedate. There is a distant prospect of middle aged housemates tolerating similar level of mess, noise, partying etc as in younger days. The problem in the UK is that there are insufficient housng models to accommodate the poor elderly, by what I mean, an absence of co-housing oportunities. Multiple occupation and shared housing does not provide the level of privacy that older people expect without confining them to the other extreme of single bedroom flats. The happy medium of small private areas and generous shared living areas is missing. Mr Clarke is likely to focus on boosting home ownership that has been associated with voting Tory without incentivising the diversity of supply to match our current needs and preferences. The obvious problems with equity sharing are coming to light (or journalists have stumbled across them). All are leasehold and many have high service charges and maintenance bills, both paid by the occupier and not the holder of the remaining equity (usually a housing association). But the problem that is not mentioned is the fact that equity sharing is a device that maintains or inflates the cost of housing that makes equity sharing necessary for so many. Take it away and the price of property would have to fall to meet what most people could afford in terms of both deposit and mortgage payments. Another case of a demand side stimulus rasing prices to require more demend side stimuli to add to the Help to Buy Equity loan Scheme that is reaching its end. Mr Clarke should resist renewing Help to Buy and recommend lending rules that disincentivise the mixture of rent and mortgage payments. High interest rates might do the trick in the short term giving the Minister time and space for a long term measure. In arranging a webinar to look at te impact that the cost of energy is and is likely to have on house prices I have found an estate agent who claims that the EPC has become the second matter of interest after price, having been 'nowhere' in previous months/years. I have struggled with finding a bank or building society to help but, on line, found NatWest to be ahead of the curve.see I am surprised by some of these findings (eg scale of EV home charging points) but encouraged by green mortgages and the trend of increasing interest in energy upgrades. This should experience a step change if we have a normally cold winter. Mr Clarke, your predecessors have been negligent in failing to establish a way of upgrading 20million homes, the result of which will be death and misery for those unable to adequately heat their sub-standard homes.

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