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Il ritorno d’Ulisse in patria

Question from Lord German in the Lords yesterday.

My Lords, I rent a flat in a block of unsafe flats in London, and I am surrounded by leaseholders who suffer greatly as a result of the turmoil and fear of the consequences. Does the Minister agree that it is now time for a comprehensive financial solution to these matters, not one that tinkers around the edges? Will he tell the House what consideration he has given to the proposal he received last week from lawyers and financial advisers on behalf of leaseholders for a special purpose vehicle that would provide the £12 billion shortfall that the Government say they are unable to meet from public funds?

Reply from Lord Greenhalgh:

My Lords, I am happy to report that I spent a considerable amount of time being briefed by Dean Buckner, who is at the heart of those proposals, the Leasehold Knowledge Partnership, and the APPG on Leasehold and Commonhold Reform. I can also say that Michael Wade has been asked by my right honourable friend to look into this matter. There was a huge amount of similarity in thinking on how to move forward. In fact, we learned a lot from the discussions. At the moment, I cannot say exactly what will be put forward. That matter is obviously above my pay grade, but we are getting there.

Blimey.

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Can’t pay and shouldn’t pay

A great article in the Telegraph today about a proposed solution to the cladding crisis that has blighted the lives of millions of homeowners.

In a report which will be released later today, experts will call for the Government to establish a “special purpose vehicle” that would raise funds on the bond market. This cash would be used to pay for cladding repairs and the bond would be repaid over time via a levy on the industry.

This would require a new tax on property sales and a levy on the freeholders which own many cladding-hit blocks. It also proposes additional taxes on non-dom and foreign buyers. From April, overseas buyers will pay a 2 percentage point stamp duty surcharge and the report said this should be increased further.

I (DB) am extensively quoted in support of the proposal.

Dean Buckner, a former Bank of England economist who helped design the proposal, said it would help leaseholders avoid ruinous charges but also ensure it was not funded by the public purse. It would also avoid a one-off “windfall tax” on house builders, which may be viewed as unpalatable by the industry.

“Asking leaseholders to pay is like asking the victims of a plane crash to pay for repairs to the aeroplane,” he added.

I am presenting the proposal to the All Party Parliamentary Group on Leasehold Reform later today, and the full report should be available soon.

[EDIT] Presentation went VERY well, which you can view here.   Passcode U$p0+snF

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Angry Actuary is Angry

I wanted to be a lion tamer

An actuary writes:

“Please be fair Eumaeus team. Most actuaries working in life/GI today encounter market consistent and risk neutral concepts on an everyday basis. The fact that some prominent valuations have not been performed in a reasonable manner by some actuaries does not mean that you should criticize the whole profession. I for one was astonished to read on this excellent blog about what has been done in the market for NNEG valuation and agree with the views mentioned here.”

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An actuary writes

Eumaeus. Please show some respect. [1] Most actuaries have degrees in mathematics/ statistics and then put themselves through countless hours of additional studying to ensure they are well placed to make these judgements. [2] I have read your articles where you make us out to be misleading shareholders and jeopardising customers for profit and it’s frankly offensive. [3] I’ve also repeatedly seen you mocking actuaries such as with your title and picture caption in the article just linked. As an actuary I follow your work out of professional curiosity; if someone thinks we are making miscalculations then I’m listening. [3] My request is just this: keep it to the maths please. (My numbering)

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