Saturday, 19 October 2013
Up the Junction
What I should be saying is "Shit, that means when one or both of us are moved into a nursing home we won't get much help from the Government in meeting the costs of changing the incontinence pads twice daily."
If we don't have to sell the roof over our heads then I suppose rising house prices will help those mentioned in our wills. But frankly that's the only benefit of home owning and rising house prices I can see. It certainly doesn't help the many in our part of London who can't afford to work anywhere else but can't afford to buy. Instead they have to put up with totally inadequate and overpriced rented accommodation.
There's a hell of a lot of building going on in London. Flats and high end town houses sprouting up all over the place. Great if you're earning something in the order of £60 -70k. Even in run down Walthamstow new flats are going up at a rate of knots. "Affordable homes" - a misnomer - make up I guess about 15% of the new build. "Social housing" much less. Many people renting don't manage to earn the minimum wage, let alone have any cash left over to save for a 5% deposit. On a one bedroom flat that's £7,000.
There's a new development being proposed near us. It's being built by Morrisons, and it's a large supermarket, a 300 space car park and a couple of hundred flats. What we don't need is another supermarket, what we do need is a huge increase in a mixed range of well built and designed housing, for rent, purchase, for single people, couples and families with kids. But it's the game that now being played and local authorities in run down areas with high unemployment are dancing to the new tune. They'll get their homes, but it comes at a cost. The supermarket will promise 300 new jobs for the locals, even taking on the unemployed. Sounds fine, except the wages are minimum. Somehow while trumpeting this job creation, no one especially not the council, wonders how many local shops will fold because of the huge unfair competitor stamping all over the High Street. How many jobs will go as a result? Many of the local shops are supplied from local wholesalers and other businesses. Will Morrison buy its supplies locally?
We're sitting on an asset that is worth £400k. That's a huge amount of potential buying power doing nothing. Currently the only way we could use that asset is to remortgage and buy into a development to rent or sell. However, at our age we couldn't get an affordable mortgage. But even if we could it wouldn't actually help the housing shortage, in effect we'd become part of the problem.
There must be a large number of people like us sitting on unused assets. Would it possible to aggregate say 40 or 50 properties, form a trust and raise capital against those assets to build new properties for rent or sale. This has been done before - building societies, housing trusts. This would be no different, except we'd all be silver haired and have nothing in common other than a fully owned home and a desire to do something with the otherwise useless asset we live in.
I suppose there will be huge regulatory hurdles to overcome, as well as a watertight legal status, but it might be possible. Ofcourse, the financial institutions may be reluctant to lend but maybe, if the scheme has some merit, the Government might make such a trust tax efficient.
It would certainly help to relieve my sense of frustration and helplessness at the totally inadequate institutional response to a basic human need - a decent, clean, affordable roof over your head.