Living above the shop

Recently, much emphasis has been put on the need to provide affordable housing in areas where property prices have soared. Rural areas have been singled out as particular problem hotspots, and Northamptonshire, where I work, is a typical county where young rural families are finding it difficult to rent in the villages where they have grown up.

Rockingham Forest Housing Association has taken the lead in addressing this problem, and recently unveiled a village development in Polebrook that will provide two-, three- and four-bedroom houses and bungalows, of which two will be for shared ownership.

But rural families are not the only ones to suffer. In towns and cities, many key workers – especially nurses and other healthcare professionals – have difficulty finding affordable houses and flats to rent.

The present government, as did its Conservative predecessor, advocates creating flats above shops to use wasted space and create new homes without mortgages. But, bearing in mind that flats above shops are likely to appeal particularly to young couples and that young people seldom have much capital to put into their first home, most would-be purchasers of flats above shops will be looking for 95-100% mortgages. And there's the rub. Building societies and other mortgage providers claim that homes above commercial premises are much more susceptible to market downturn that other properties, and typically will give no more than 85%. In addition, repayment rates tend to be higher, hitting younger buyers even harder.

If we are serious about providing alternative homes for young people, including key workers, and the concept of homes above commercial premises is ever to become more than just a concept, mortgage providers need to be persuaded to treat young people more sympathetically. Over to you, Mr Prescott.