This will do nothing to help anybody affected by the housing crisis

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Commenting on today’s announcements by the Prime Minister Jonathan Rolande, from the National Association of Property Buyers, said:

“This policy will do nothing to help anybody affected by the housing crisis. At best, one home that is already occupied will be sold with a large subsidy to the current occupier.

In its place, another will be built meaning that the number of homes for low earners and the more vulnerable in our society will not change.

“The National Association of Property Buyers is concerned that in reality the number may reduce.

We should expect the appetite to buy up property to likely outstrip the ability to build replacements. This will be exacerbated by the lengthy planning processes, nimbyism and a shortage of materials and labour to build them.

Comparisons are being made with the sale of council housing decades ago, but this comparison is flawed. Council homes were owned by the state and whilst they had a notional value, the money for discounts didn’t have to be found. A property owned entirely by a council and sold for £50,000 even with a 40% discount results in £50,000 appearing in the council’s coffers.

Housing Associations are usually private entities who will need to be compensated for the enforced discount, so it appears that there will be a net loss for the taxpayer, rather than the ‘gain’ of the council house sales. This is an issue that needs to be addressed.

The National Association of Property Buyers have concerns about fairness too. A housing association tenant will have lived for many years in a relatively secure and well run home. They will now benefit from a discounted purchase scheme not offered to millions in the more volatile private rented sector.

Rolande has other concerns; Will banks be as sympathetic to missed mortgage payments as a housing association would have been? I suspect not and there is a real risk that those just getting by will now be at the mercy of large corporate lenders.

Many that buy in blocks of flats will find themselves liable for high and often variable maintenance costs that they are currently insulated from, potentially pushing them into difficulty.

It is rightly the ambition of millions to eventually own their own home. But even ignoring the many concerns around this policy, I don’t believe this will do any more than scratch the surface of the real issue.”

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