Yesterday (Thursday 5 May 2022), the Bank of England raised interest rates to 1%, the highest level since 2009. It also warned that inflation is expected to increase to more than 10% by the end of 2022.
Responding to the news, Clare Miller, Chief Executive of Clarion Housing Group, said:
“The rise in interest rates announced today adds yet another layer of challenge and uncertainty to the lives of our residents across the country.
“Rising inflation was already having a disproportionate impact on many of our social housing residents, with 1 in 4 telling us they struggle to heat their homes as they would like. But today’s interest rate rise will also affect some 200,000 homeowners with shared ownership mortgages across the country – those who purchase a share of their new home and rent the rest.
“Our new shared owners have an average household income of £42,000 and those who rent from us typically earn just under £15,000. It’s clear our residents, some of the lowest income households in the country, need extra support with their cost of living more than ever.
“Having a safe and secure affordable home is one way many of these households can manage economic uncertainty, and we are committed to providing vital affordable housing and services to those who need them most. Last year we built nearly 2,000 new affordable homes for shared ownership and rent, while our charitable foundation – Clarion Futures – continually provides support to help residents manage their finances.
“But we can only do so much. Government’s temporary uplift of Universal Credit during the pandemic proved a powerful and positive mechanism to support the most vulnerable. We urge them to consider a further uplift to hand our residents another lifeline and help stave off this latest economic challenge.”