Sunday 30 June 2013

Sunday, June 30, 2013 Posted by Jake 3 comments Labels: , , , , , ,
Posted by Jake on Sunday, June 30, 2013 with 3 comments | Labels: , , , , , ,

UPDATE JAN 2017: One of the government's flagship home ownership programmes, the Help-to-Buy Mortgage Guarantee scheme, ended on 31st December 2016. It has helped more than 100,000 individuals or couples onto the property ladder. The Council of Mortgage Lenders said it had worked "exceptionally well", making mortgages more available when it started in October 2013.

However Shelter argued that the scheme helped to push up house prices, and only helped those who needed little or no help. They said: “Drawing on official statistics and analysis, this research finds that Help to Buy has added around £8,250 to the average house price. In other words, it has helped a small number of people to buy, at the expense of worsening the overall affordability crisis for everyone else.”

Meanwhile, the Tory’s more recent 'affordable' starter homes programme kicks off in 2017. But Shelter points out that these “affordable homes” will cost up to £450,000! No doubt the perverse results will be the same. READ ON...

"What's in a name? That which we call a rose by any other name would smell as sweet" (Romeo & Juliet, Act2 Scene2).

Juliet's assertion applies both ways. A rip-off by any other name still stinks. You might think the 'affordable housing' policy is aimed at those who find it hard to afford their housing. There you would be right. You might think that the policy is aimed at people on low and modest incomes (e.g. nurses on £25k, firemen on £23k). There you would be wrong. After all, however much money you have there is always something that costs just a bit more than you can afford (think yacht, football club, income tax).

The sell-off of social housing in London starting in 1979 with the Tories' "Right to buy" scheme, rolled on virtually uninterrupted through the Labour government of 1997-2010, and continued into the Con-Dem coalition from 2010.

The original 'right' to buy at a considerable discount to market value (the discount was increased to up to £100,000 discount in London and £75,000 in the rest of the country in March 2013) was given specifically to public sector tenants. However this has been an open invitation to speculators entering into 'deferred purchase' agreements, where the council tenant has been the middleman - exercising his right to buy, and then selling on to private landlords both individuals and companies. A report by the Daily Mirror newspaper exposed the extent to which council housing has been taken over by private landlords:

"A Daily Mirror investigation found a third of ex-council homes sold in the 1980s under Margaret Thatcher were now owned by private landlords. In one London borough almost half of ex-council properties are now sub-let to tenants."

This opportunity to turn a profit is particularly succulent in London, where rents are literally streets ahead of anywhere else in the UK.

London, which according to the Homes & Communities Agency has about the greatest concentration of people in temporary accommodation, has the greatest need for affordable housing. 

So with this huge problem of people in temporary accommodation in London, it would be churlish to criticise an attempt to help people onto the housing ladder by building 'affordable housing'. Until, that is, you notice who this housing is supposed to be affordable for. In 2011 the mayor of London, Boris Johnson, proposed his "First Steps" housing programme. At that time the eligibility criteria was:

"The upper household income for First Steps homes will be set at £74,000 for families buying a home with three or more bedrooms. For single people and all other sizes of home the upper income limit will remain at £60,000."

£74,000? Even MPs would qualify for that. Boris later increased the upper limit to an annual income of £80,000 per year!

Snap taken in June 2013
In his "Mayor's Housing Covenant", Boris states:

"Eligibility is now on the basis of income rather than employment, thus helping a far greater number of low and modest income Londoners."

To be fair, from Boris and also David Cameron and George Osborne's points of view £80,000 probably is a 'low and modest income'. However HMRC figures show only the richest in the UK population earn more than this.
In fact figures from the Office of National Statistics show that those with household incomes more than £80,000 per year (£1,538 per week) are so few they aren't worth measuring as a separate group:
"BHC" means Before Housing Costs
So it would seem "affordable housing" in London which can be bought by even the wealthiest people is simply nonsense. Or is it? We will let Boris Johnson himself explain (from BBC's Question Time of 20th June 2013. It's just 90 seconds of time well spent): 

So there you have it. Boris is perhaps the most amiable of the Tories. He uses his big nincompoopish teddy bear image as camouflage. Never forget, bears are not honey loving cuddly-wuddlies. When they see fresh meat they eat it.


  1. Can you please post a link to the documentary about Boris Johnson

  2. Thanks to @Wolfie_Smythe for pointing us at this handy site by the Resolution Foundation

    For example it shows 2 people each earning £40k (joint income of £80k), with no children, are richer than 93% of Brits.

  3. Reported by the Independent:

    "Chancellor ignored advice from Treasury to launch Help to Buy scheme..
    Last September, the Chancellor claimed Help to Buy “is driving a big increase in house building, boosting the construction industry and increasing housing supply”
    But Treasury advice from two years ago, when the policy was being formulated, predicted that such equity loans “will have a limited impact on housing supply since most of the sales are likely to be for homes which would have been built anyway”.

    The advice, obtained by The Independent though a Freedom of Information request, also suggested the majority of the purchases made through the scheme “would likely have happened anyway over time”..


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