From benefits to bricks speech

ended 09. June 2022

Boris Johnson has just declared his ambition to turn “benefits into bricks” and give everyone with the chance to own their own home, thus "finishing  the right to own reforms Margaret Thatcher started".  Among other things, the PM announced:

  • the launch of a new right to buy scheme (with one-to-one replacement of properties sold)
  • enabling people to use housing benefit to help buy their homes
  • a comprehensive review of the mortgage market, to ensure a better supply of low-deposit mortgages
  • a target of supercharging leaseholders' ability to purchase their freehold
  • a continuation of the revolution in renters' rights

More can be found online (BBC/Guardian, etc). What's your verdict? Please keep your responses nice and punchy. The sooner you respond, the more likely you'll get coverage.

8 responses from the Newspage community

This is the ultimate political meringue: sweet, lightweight and with very little substance. Homeownership levels are lower now than they were in 2010, and we know that vast swathes of right to buy houses have ended up in the hands of private landlords. We don't need more right to buy schemes, we need to get more homes built and to bring down the cost of buying and owning a home. Talk about fiddling while Rome burns.
The benefits proposal is a bit leftfield and I'm not sure lenders will like it. Using benefits, especially housing benefits or Universal Credit, is not ideal to base a mortgage on and even if it is used it is unlikely to boost borrowing eligibility that much to make a big difference. Also there is a question mark around eligibility that could change through the borrower's circumstances or changes in policy around who is eligible. If someone is relying on it and it gets taken away or reduced then that is a risk if the mortgage then becomes unaffordable. As far as the new right to buy scheme is concerned, this may help some but it is a bold claim that every house sold will be replaced by another to ensure social housing does not reduce further. Given the fact that the Government have failed to get close to any housebuilding targets, this seems a big ask. As ever, the devil is in the detail, and the Government has a record of announcing so-called market changing initiatives only for it to achieve very little. Why a review of the mortgage market is needed to see if deposits can be reduced borders on farcical. Borrowers can get loans with a 5% deposit already and reducing that further just means that more are at risk of negative equity if things go wrong. All of these schemes seem to be demand-sided, which keeps the prices of properties high without addressing the real supply side issues. The Government would be better off to nationalise a housebuilder and build their own affordable housing in places people want to buy or create new places complete with infrastructure that make it appealing.
Boris has, yet again, failed to address the fundamental issue of the current housing market. Until the crisis around the shortage of houses is solved, the ever increasing demand for property will continue to see house prices soar. Those that predicted that rising interest rates, out of control inflation and the rise in living costs would immediately translate into a housing market crash have been proved wrong. Over the past few months our recent mortgage enquiries demonstrate that demand remains as strong as ever, with many people needing to offer well over the asking price for properties in many areas of the UK. Until this supply shortage is addressed, these measures announced will simply exacerbate the situation we are currently in, not to mention that is highly likely mortgage lenders will struggle to adjust their criteria and adapt to these new rules.
No more partygate hangover, it looks like its a housing party for 2022. The “benefits into bricks” is certainly a catchy gimmick but its also likely to go down very well with working class voters. Home ownership is still the dream for a large number of renters in the UK. Also it doesn't look like the housing market will be slowing down any time soon, if new measures are introduced to make it easier to get a mortgage.
Once again, we are seeing headline grabbing housing stories from the government but in reality, that's all that they are. Fristly, the government is unable to force housing associations to take part, nor can many living in these properties afford to buy them, even at a discount. No goverment has ever ensured that funds from right to buy will be invested in new properties and that's partly why we are where we are. This is a typical "dead cat bounce" tactic and has little to do with reality. We already have 95% loan to value mortgages. How many people, in receipt of housing benifits are able to save for a deposit, never mind meet lender's affordibility criteria. Stop the gimmicks and build more affordable housing!
Whether Thursday’s speech will be a vote winner only time will tell. For now, all we know is that the price of property will have to be lowered considerably for renters to be able to afford to buy given the size of deposits required. Buying high and selling low is just one risk. More broadly, I can't see how the figures will stack up. Again, a lot of Boris nonsense.
The whole policy package just seems like political waffle to me. Last time I checked, lenders dictate what income they will allow for a mortgage application. The real issue here, which isn't being addressed, is the lack of homes being built and availability of stock. That is the problem with the property market.
Kind Financial Services
"As is often the case with these announcements, the devil is in the detail but as it stands I can't work out how this would possibly work. It's simply a huge distraction from #partygate. Most people or families that rely on housing benefits don't have much, if any, disposable income, so what happens if they purchase their own home and suddenly they need a new boiler, a roof repair or a replacement kitchen? Will the government increase their benefits to cover the costs of maintaining their home? Is this about giving people financial security or cutting costs? A mortgage also requires additional costs such as buildings insurance. Whilst it's not required, I would suggest that it wouldn't be recommended to take a mortgage without life cover if it's a joint mortgage so as not to leave a remaining party trying to repay the entire mortgage on a single income in the event of a death. Again, is the Government going to factor all this into the benefits in order to encourgage homeownership? If a person's circumstances change, will the Government look to improve the support package that they have for homeowners to reflect the fact that they have encouraged people to take out mortgages on these properties? Currently, you would only get support paying the interest on your mortgage and only by way of a loan, which is repaid if you sell the property.