Sunday, 8 March 2015

Tory policies flawed; social housing the answer

Yet more promises from the Tories about doubling to "200,000 the number of cut-price starter homes" when social housing has almost disappeared in many places. Far better for Cameron to stress that now is an excellent time for councils to be borrowing the necessary capital to make good the housing shortfall. With inflation currently so low, real interest rates are near zero levels.
  What, perhaps, is equally relevant is that Tory promises on housing are not actually worth the cigarette packet where, according to some wag no doubt, the policies first saw the light of day. "Helping aspiring homeowners to buy" may well be a "key part of the long-term economic plan", as the housing minister, Brandon Lewis says, but as that same "plan" aims to take spending by the government back to levels last seen in the 1930s, and that Tory policy is evidently to repeat untruths so frequently, eventually many voters will believe them, why should these latest pledges be taken seriously? The latest English Housing Survey reports that total home ownership has fallen by 206,000 since the coalition took office, whilst at the same time, profits made by private landlords have soared exponentially.
      It should not be forgotten that a previous, similar pledge was made by Cameron and the then housing minister, Grant Shapps, that council homes sold under their Right To Buy scheme would be replaced "one-for-one" with new, affordable homes! In actual fact, since April 2012, 2,300 homes have been built, to replace the 26,000 sold off, roughly one built for every eleven sold.
      Social housing has to be a priority for Labour`s manifesto, not only because the majority of new housing currently being built is nowhere near the "affordable" range, but also because it would decrease the demand for privately rented property. However, if local authorities are to be encouraged to provide the much-needed housing, "Right to Buy" has to go, or at least for election purposes, be put on hold, but the other main argument in favour of providing more social housing is that the alternatives being offered do not work.
    Cameron`s electioneering plan to supply more homes for first time buyers, something he has suspiciously not thought worth considering over the previous five years, places no requirement on the builder to provide genuinely affordable homes, so prices are still likely to be too high for the likes of hard-working teachers, social workers  and nurses wanting to get on the so-called first rung of the housing ladder. How can they hope to save for deposits when they have to pay 20% of their earnings on income tax, 9% paying back their student loans, approximately 10% on national insurance, plus anything like another 40% on their hugely-inflated private rents, and more still, on food and travel?  Cameron has stated that buy-to-let landlords will not benefit from his scheme, but that will not prevent them buying the new homes at non-discounted prices; charging often obscenely high rents for inadequate properties means that finding deposits is no problem for these modern-day Rachmans. The Mortgage Advice Bureau has calculated that these landlords have 15% more equity available than this time last year, so they will be, as always, first in line when property becomes available. Any initiatives encouraging home ownership should include a proviso that the buyers, benefitting as they are from taxpayers` funded schemes, must live in the home for five years after purchase. 
     There is even worse news for first time buyers: the relaxation of pension rules next month will allow those accessing their pension funds to invest in property, and with savings rates so low, this is clearly a viable option for many. Whilst this may be welcome news for some whose parents are investing pension pots on their behalf, for the majority of young people the prospect of home-ownership will be as remote as ever.
    The priority has to be more social housing, if only to enable tenants to escape the clutches of their greedy private landlords! Labour has some proposals to check the profiteering of these landlords, but they don`t go far enough, and will not see the much-needed reduction in inflated rents. A countrywide building programme of social housing is essential.

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