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The ‘benefits to bricks speech’: what the PM said about housing
Boris Johnson’s speech today included plans to extend the Right to Buy to housing associations, to enable tenants to use housing benefit to buy their home, and to review the mortgage market.
The prime minister today made his first speech since this week’s confidence vote, which saw nearly 40% of his MPs vote to oust him as leader.
Attempting to reset his premiership, he went to Blackpool and made a speech attempting to set out how the government aims to tackle the cost of living crisis and move the country forward.
He began with a focus on housing and set out his plans to try to boost homeownership and tackle the ever-reducing percentage of people, particularly young people, who own a home.
Inside Housing picks out the key points of the speech.
Tenants can use housing benefit to buy a home
“When ownership remains beyond the reach of a great many hard-working people, it’s neither right nor fair to put ever-vaster sums of taxpayers’ money straight into the pockets of landlords.
“The total bill for Housing Support stands at about £30bn each year, and the Office for Budget Responsibility has warned that if we don’t take action, it could reach £50bn by 2050.
“That is cash, taxpayers’ cash that is being simply swallowed to pay the mortgages of private sector landlords or by housing associations.
“It is time to put this huge wall of money, taxpayers’ money, to better use. It is time to turn benefits to bricks.
“So we will look to change the rules on welfare so that the 1.5 million working people who are in receipt of housing benefits and want to buy their first home will be given a new choice: to spend their benefit on rent as now, or put it towards a first-ever mortgage.
“Doing so removes a significant barrier that currently prevents hundreds of thousands of families from buying their own home.
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“To remove another we’re going to explore discounting Lifetime and Help to Buy ISA savings from Universal Credit eligibility rules.
“Not letting anyone claim benefits while sitting on vast savings pots that they could be drawing on. That’s not the people we’re targeting here.
“But making it easier for hard-working people to put away a little each month until they have enough for a deposit on their first home.
“To help keep people in a home if they’re unfortunate enough to become unemployed, we’re going to let people access support for paying their mortgage that much earlier than is presently the case.
“And last of all we’re going to look at how we can securitise some of that colossal £30bn housing benefits bill, so we can build more social homes with the potential for Right to Buy.”
Extending the Right to Buy to housing associations
“And just as no generation should be locked out of homeownership because of when they were born, so nobody should be barred from that same dream simply because of where they live now.
“For four decades it has been possible for council home tenants to use a discount to buy the property they live in.
“Over that time almost two million people have been helped into homeownership.
“They have switched identities and psychology, from being dependent on the state for every repair – from damp-proofing to a new front door – to being in charge of their own family home, able to make improvements and add value as they please.
“For various reasons the number of tenants who actually use this freedom has been steadily diminishing.
“So now is the moment to widen the possibilities, and to give greater freedoms to those who yearn to buy.
“I want us to deliver on the long-standing commitment, made by several governments, to extend the Right to Buy to housing associations.
“There are still 1.6 million households living in council homes.
“But there are now 2.5 million households whose homes belong to housing associations – and they are trapped.
“They cannot buy, they don’t have the security of ownership, they cannot treat their home as their own or make the improvements they want.
“And while some housing associations are excellent, others have been known to treat their tenants with a scandalous indifference. So it’s time for change.
“Over the coming months we will work with the sector to bring forward a new Right to Buy scheme.
“It will work for tenants, giving millions more the chance to own their home.
“It will work for taxpayers: responsibly capped at a level that is fully paid for; affordable within our existing spending plans, and with one-for-one replacement of each social housing property sold.
“Even as we deliver this homeownership revolution, we will continue with our revolution in renters’ rights.”
Review of the mortgage market
“We need also to recognise that while the people of this country overwhelmingly want the chance to own their own home, for too many the finance required is simply not available.
“The challenge facing first-time buyers today is far greater than anything we have seen before. 20 years ago – in 2002 – a home cost average four-and-a-half times your income.
“Today that multiple has risen to nine times your income.
“We have a ludicrous situation whereby plenty of younger people could afford to make monthly payments – they’re earning enough to cover astronomical rent bills – but the ever-spiralling price of a house or flat has so inflated deposit requirements that saving even just 10 per cent is a wholly unrealistic proposition for them.
“First-time buyers are trying to hit a continually moving target.
“And of course the global rise in the cost of living is only making life harder for savers.
“So we want it to be easier to get a mortgage.
“Working with lenders so that they recognise the creditworthiness of tenants with a track record of paying their rent on time.
“Making sure that the self-employed also get the mortgages they need.
“This government has made sure that there is a healthy supply of 95% mortgages. Tens of thousands of first-time buyers have since bought their home thanks to our mortgage guarantee scheme.
“But we’d like to go further. So today I can announce a comprehensive review of the mortgage market.
“Reporting back this autumn, it will look at how we can give our nation of aspiring homeowners better access to low-deposit mortgages, and what our own mortgage industry can learn from counterparts around the world who have all kinds of alternative ways of offering finance, managing risk, and unbolting the door to ownership.”
Leasehold reform
“We’re also dealing with the scourge of unfair leasehold terms, often every bit as onerous as the conditions imposed upon tenants by landlords but applied to those who as homeowners should have far greater control over their homes and their lives.
“In this parliament we will supercharge leaseholders’ ability to buy their freehold, helping 4.6 million households genuinely to own their own home with discounts of up to 90% for those trapped with agious, escalating ground rents.”
Brownfield sites and self-build
“So Michael Gove has been developing plans to work hand in hand with local communities across England to build more of the right homes in the right places.
“We are going to put more publicly owned brownfield land to use and seek to unlock small sites that are ideal for the kind of unobtrusive development that communities welcome, with priority for first-time buyers and key workers.
“We are supporting self-build and custom-build homes, as has long been proposed by my colleague Richard Bacon.
“And we will sensitively make use of existing planning rights, for example by making it easier to turn disused agricultural buildings into homes for local first-time buyers, and to support farmers in growing and diversifying their businesses.”
