Boris Jonson's Announcement
Last month we saw Boris Johnson deliver a speech touching on several new major housing policy initiatives. One in particular which has caused quite a
stir is his pledge to ‘turn benefits to bricks’, meaning a change in welfare rules which will see 1.5 million people who are in work and also claiming housing
benefits will have the option of using their benefits to pay for a mortgage rather than for a rented property. 2.5 million tenants renting properties from
housing associations will also be given the right to buy them outright.
Johnson’s aims are to boost the homeownership levels, and says that a lack of action could result in the total bill for housing support increasing by 20 billion
pounds by 2050. His policy considers that the taxpayer’s money is being ‘swallowed’ to pay the mortgages of private sector landlords and housing associations.
In an attempt to remove the barrier preventing hundreds of thousands of families from buying their own homes, he pledges to change the rules giving the choice
for those in receipt of housing benefits to spend the money as rent or use it towards their first-ever mortgage. As well as this, he says they will explore discounting
lifetime and help to buy ISA savings from universal credit eligibility rules, and look to utilize some of the 30 billion pound housing benefit costs toward building
more social homes with the potential for right to buy.
Whilst in theory the news suggests this will have a brilliant impact on the level of people who own their own homes, the policy has received its
fair share of criticism. Those opposed to the pledge argue that the speech delivered by Johnson will not deliver the suggested results, and was an
attempt to distract from the recent confidence vote which saw 148 of his own MPs voting against him. Critics have pointed to the regulations on
welfare rules meaning the sum received by claimants of universal credit reduces when savings exceed £6,000, and stop entirely if those savings
exceed £16,000 which in a large number of cases may not be sufficient for putting down a deposit on a property.
Mr Johnson’s statements about discounting lifetime ISA and help to buy ISA savings from eligibility rules will of course impact this, although by
how much is difficult to predict. When put into practice, it will be really interesting to see how and if this affects the property market.
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