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H is for Housing.......



If you don't have time to read a long article now, please come back later. If a small business owner, the point of the article is to encourage you to think about the challenges you face and find ways to deal with them. A solution is often possible, if we step back and talk through the options available.


This is the first of 4 articles about widespread challenges people face right now., not just in business. Housing has been in the news for ages, either because we are being told how to change our rooms, redo our gardens or relocate somewhere else. More recently it's been about rising interest rates.


Increasing bank base rates has been the traditional method of reducing inflation. As your monthly mortgage goes up, you have less to spend, so demand drops and prices stop rising.


Unfortunately, over the years the expansion of fixed rate mortgages means this is an increasingly blunt instrument. You don't notice the increase until you come off a fixed rate deal. Internet searches reveal only about 1 million of 8 million UK mortgages are on standard variable rate. They feel the pain straight away, about 2 million fixed rates are due to end in the next two years so they will not feel the pain until then.


Housing is in short supply, landlords put up rents because of rising mortgage payments so it's all very tricky. We look to the Government to help, but there are many aspects to this. Where do you start?


Everyday Business Support is about helping small businesses make better decisions to push their businesses further. Applying that principle to housing, are there any easy starting points?


According to Government data from 2020 there was at that time nearly 650,000 empty homes in England. The Big Issue have estimated that the number of homes empty for more than 6 months rose last year (2022) to 257,000.


Why are these homes empty? Again a number of factors. It could be they are being used for very short term lets, or it could be they need repairs to put them into a lettable state.


What the government and councils could do, working together, would be to reinvigorate the empty housing stock and get it put back on the market. Either by short term loans to pay for the repairs or through tax incentives. The potential cost on government finances hopefully offset by increased council tax receipts and uplift in tax receipts on higher rental profits. For tenants, more property choice and even reduced rents because of the increased supply.


As with any attempts to change, there has to be a willingness to change. Action always speaks louder than words. Delay or dither just prolongs the pain.


Next time, H is for Heating………

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