Boris Johnson will reportedly allow people to use their housing benefits to buy homes, as part of a set of policy announcements aimed at easing the housing crisis and ensuring his own habitation of Downing Street continues.
Seeking to regain the initiative after 41 per cent of Tory MPs voted to oust him, the prime minister is expected to use a speech in Lancashire on Thursday to announce plans to tear up rules stopping people from declaring the benefit as part of their income when applying for a mortgage and using it to make monthly payments.
With the cost of housing benefits having been expected to rise to ￡30bn last year, Mr Johnson will reportedly argue that this money would be better spent helping people onto the property ladder than on paying their rent – in a policy dubbed “benefits to bricks” by one minister, according to The Times.
While the minister reportedly claimed the plans would enable young people to pass mortgage lenders’ affordability checks, former pensions minister Steve Webb told the paper that “support would have to be substantial and sustained for low-income households to be attractive to mortgage lenders”.
Labour frontbencher Jess Phillips was also among those questioning how the policy will work because individuals with more than ￡16,000 in savings and investments do not qualify for the benefit. “It’s almost as if Boris Johnson doesn’t do much benefits casework,” she quipped.
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The prime minister is also expected to confirm plans to extend the right to buy to housing association tenants, announce a review of the mortgage market to look for ways to reduce people’s deposits, and may declare plans to construct thousands of modular or “flatpack” homes, according to various reports.
A No 10 official told The Sun that Mr Johnson would “confirm his ambition to unlock the opportunity of home ownership for more people through helping those in a position to buy, to access the mortgage finance they need, ensuring people are incentivised to save for a deposit no matter their financial situation, and improving the supply of housing across the country”.
Labour has previously branded the right to buy scheme “desperate”, pointing out that it repeats a policy from David Cameron’s 2015 Conservative Party manifesto which failed to deliver.
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Shelter’s chief executive Dame Polly Neate said the “hare-brained idea” was “the opposite of what the country needs”, warning: “There could not be a worse time to sell off what remains of our last truly affordable social homes.”
But speaking to ITV News on Wednesday evening, housing minister Michael Gove appeared to suggest that Mr Johnson was committed to ensuring that new homes are built to replenish the stock of properties sold under the scheme.
“We both need to build more social housing and help people into ownership,” Mr Gove said. “When Conservative governments in the past were successful in extending home ownership, they were also building council and social homes as well – that’s what Winston Churchill did, that’s what Harold Macmillan did.
“We’ve got to get back to that and the prime minister is determined that we have a Churchill/Macmillan-style approach, helping people into home ownership and at the same time using the money that we raise in order to build more homes so that people can live in decent circumstances, in new council and social homes, and people can also get the deposit together and aspire to own their own home in due course.”
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But the Times said Mr Johnson’s desire to give millions of tenants the ability to pay for housing association properties at discounts of up to 70 per cent is likely to be limited to a series of pilots for now, without additional government funding.
According to a preview of Mr Johnson’s speech handed out by Downing Street, he will also pledge that in “the next few weeks, the government will be setting out reforms to help people cut costs in every area of household expenditure, from food to energy to childcare to transport and housing”.
The prime minister will also promise “to cut the costs that government imposes on businesses and people up and down the country” – despite his prior tax hikes.
“We have the tools we need to get on top of rising prices,” Mr Johnson is expected to say.
“The global headwinds are strong, but our engines are stronger. And, while it’s not going to be quick or easy, you can be confident that things will get better, that we will emerge from this a strong country with a healthy economy.”
Additional reporting by PA