Mortgage arrears are down, but for tenants the housing hangover worsens

Outlook

Borrowers should overpay their mortgage each month if they can afford to (Corbis)

It’s the end of the week so we’ll go with the good news from the housing market first: according to the Council of Mortgage Lenders arrears are running at their lowest levels for more than a decade. Sadly there’s also some bad news, as will become clear today when landlords’ trade body, the Association of Residential Letting Agents (Arla), issues a report showing that the average first-time buyer will have spent a staggering £52,900 on rent before owning a home. For those starting to rent this year things are even worse: they can expect to spend £64,000. Both figures are much higher for London and the South-east.

These two pieces of news are not unrelated. While the economy has played a role in the low level of arrears, as have historically low interest rates, regulation has also played a part. Getting a mortgage is no longer easy. Affordability, tested against much higher interest rates, has to be rigorously assessed before loans are granted. That is not necessarily a bad thing, when you consider the impact of the cavalier lending before the financial crisis. Were it not for those interest rates, which have persisted for longer than anyone expected, hundreds of thousands of people might have been forced out of their homes.

A little conservatism in banking can be a very good thing. But it does have consequences, one of which is the creation of a generation of tenants, who face having to wait many years before they can get on to the housing ladder, if they are ever able to.

So, has policymaking caught up with their needs? Or is it making their lot worse? That is open to debate. The Government has set out its stall, with the ideologically driven sell-off of housing association properties, combined with measures to restrict buy-to-let lending. It wants to encourage the Tory trope of a property-owning democracy, but not one in which people buy rental properties as an investment.

Arla, however, argues that raising taxes on the latter will simply result in costs being passed on to renters – particularly those who live in areas where buy-to-let lenders like to splash their cash, such as London and the South-east. It might not matter if alternatives were being made available, through publicly owned housing stock. But, of course, that’s being sold off.

Google may be streets ahead, but where’s its street smarts?

Its fearsome questions for prospective employees have been dissected in numerous books and articles: could you handle a Google job interview? The company’s accounting arrangements are so complex that it took six years for HM Revenue & Customs to decide how much UK tax it should pay. And the answer may well be wrong, if the critics (including this one) are to be believed. Its frequently superlative products are driven by ferociously complicated algorithms. And it is able to hire some of the best and the brightest minds on the planet. Not least because of the power of brand Google. Who wouldn’t want those six little letters on their business cards. Or e-cards.

And yet, before a hearing of the House of Commons Public Accounts Committee, Matt Brittin, the boss of Google Europe, couldn’t put a figure on its UK profits. Or even on how much he earns. He managed to make a corporate titan look, well, a bit silly.

The amazing thing is that the company didn’t see this coming. Did the Googlers perhaps think their HR people were the only ones who could ask challenging questions? Or could it be that among all those frightfully clever people there is one trait that is lacking: street smarts. Perhaps Google might like to consider taking a stand at the next recruitment fair hosted by the University of Life and paying close attention to some of the clever people who went there from the School of Hard Knocks. It could help the company avoid getting egg on its face in future.

Employers are failing to tap a huge pool of hidden talent

Britain’s “skills gap” is being debated again, with research by the jobs website Totaljobs.com warning about mismatches between what employers need and what is available to them in the talent pool. The Government is boldly declaring it is targeting full employment in five years (yes we have been here before). Employers say that won’t happen if the gap isn’t filled.

But are employers simply looking in the wrong places? As the disability charity Scope has noted, unemployment in the section of society it serves (full disclosure, I am in it) stands at 50 per cent. Far too many employers see only the impairment when presented with disabled candidates, thus ignoring a vast reservoir of skills.

But it’s not just disabled candidates. A couple of weeks I ago I revealed in this newspaper that black graduates are paid 23 per cent less than their white counterparts. In my research for the article, I was told that employers are failing this group when it comes to support mechanisms. Once again, they are managing to miss out on workers who might just have the skills they need.

I’ve written before about the shameful lack of women in senior positions; and the challenges still faced by people from the LGBT community are well known.

Progressive employers might consider addressing these issues. They’d benefit handsomely, but not all employers are progressive, and the Government might consider whether they’ve had enough carrot and could do with a judicious poke with a stick.