From the TUC

More funding for home ownership but nothing for social housing #SpendingReview

25 Nov 2015, by in Society & Welfare

The commitments on housing in the Chancellor’s autumn statement have now been “marked” by the TUC. The government is vulnerable on a number of aspects of their record in this key area and this was their chance to put it right. In practice, they probably scored 5 out of 10 at best.

There will be a few more marks awarded later for doubling the government’s housing budget, albeit from 2018-2019 onwards.

However, like a student panicking in a exam, they completely failed to answer part of the housing question, thus destroying their chance of getting a high  score.  There was nothing at all to boost social housing even though there are about 1.5 million families on the waiting list. The chancellor ignored this issue even though this is where the housing crisis really pinches hardest. He needs to find a way to ensure that the poorest families are decently housed so that they have a better chance of finding employment and we can genuinely move towards being “all in it together” TM. Sadly, the planned extension of Right to Buy is certain to make the problem worse.

But the hardest part to read at this stage was the five-point plan to increase home ownership. This re-states a central tenet of Conservative policy for the last 35 years. As Michael Heseltine put it in the debate on the 1981 Housing Bill, “There is in this country a deeply ingrained desire for home ownership. The Government believe that this spirit should be fostered.”

But the reality has been very different, with homeownership firmly in retreat. According to the ONS  Labour Force Survey, the number of people living in  homes that their family was buying with a mortgage or owned outright fell by 871,000 between Q2 2010 and 2015. In  five years of Coalition Government the proportion of the population living in a privately owned homes fell by 3.6 percentage points, down to 63.9 per cent.

The spur to action for the chancellor is clear, but although some of the planned measures may turn out to be worthwhile, they may not be strong enough to reverse with crisis.

Plans for the next 5 years include 200,000 starter homes to be sold at 20 per cent below market values and 135,000 shared ownership homes. This could be helpful, but only if these homes are broadly spread throughout the UK and largely targeted at lower earners. There is thus some concern that the government plans to “relax and remove previous restrictions such as local authorities’ rights to set additional eligibility criteria.”

The increase on Stamp Duty Land Tax on additional residential properties and second homes to 3 per cent is a small step in the right direction, although given that house prices are currently rising at 5.3 per cent per year (Source: Land Registry), this might not be enough of a deterrent to stop housing being bought simply as an investment.

Remarks – government has made a start, but must try much harder on housing.

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