Boris bets the house on housing shake-up

Boris Johnson unveiled an ambitious housing shake-up today to get four million more people onto the property ladder as part of his bid to reset his beleaguered premiership.

In a speech in Blackpool, the PM announced an extension of the Right to Buy scheme that would give housing association tenants the chance to buy their house at a hefty discount linked to how long they’ve lived there.

Michael Gove, the housing secretary, has promised that a home will be built for every one sold off under the new scheme, although the details remain vague.

The most radical idea in the package – dubbed “benefits to bricks” – is to change the rules to allow lower-paid workers to use their housing benefit to secure a mortgage. Johnson argued that the £30bn in housing benefit that goes on rent would be better spent helping people become first-time buyers. 

Choosing home ownership as the main thrust of the PM’s reset makes political sense. It was a flagship policy of Margaret Thatcher’s, and Johnson will be hoping the scheme gives his credentials as a true blue Conservative a much-needed polish.

But will any of it work? There are quite a few snags, and the lack of joined up thinking won’t do anything to dissuade critics who see the rollout as being designed primarily to solve a Boris-shaped problem.

As the Times’ Steven Swinford notes: “At the heart of the [benefits to bricks] policy lies a fundamental catch-22 – people cannot claim housing benefits if they have more than £16,000 in savings, but they would need savings for a deposit.”

Lisa Nandy, the shadow levelling-up secretary, called it a “back of the envelope policy” and pointed out that there’s no sign of mortgage providers having been brought on board. If lenders don’t want to lend, the policy will be “completely unworkable”, she said.

Nor does the package address a more fundamental problem: there still aren’t enough houses. As former Treasury boss, Nick Macpherson, put it: “One day many years hence HMG will accept that the way to make housing affordable is to ensure supply outstrips demand: that would be leadership. Until then, expect numerous initiatives to pump up demand to support those who own property at the expense of those who don’t.”

Indeed, Johnson admitted today that he couldn’t guarantee the manifesto pledge to build 300,000 houses a year by 2025 would be met. 

For many Tory backbenchers, the highlight of Johnson’s speech will not have been the housing plans, but his admission that the tax burden is too high. The PM said he hoped to cut taxes “sooner rather than later”, but didn’t say how or when. The talk of tax cuts will be welcomed by those in his party who are demanding action now. But the lack of detail will not have pleased them.