On the face of it, it's easy to criticise the mortgage rescue scheme introduced by Labour in 2009. At first, there were a limited number of takers, with local authorities only helping a fraction of the households that came forward with difficulties.
Now the National Audit Office has weighed in by pointing out that only 2,600 households were helped to avoid repossession, instead of an expected 6,000, while the cost to the Exchequer was £240m compared with the forecast £205m.
The main reason for this is that, where households qualified for assistance, most opted for the more expensive option of selling their home to a housing association and becoming tenants rather than the cheaper option of an equity loan from the government. In other words, at the height of the credit crunch and recession, they opted out of home ownership. Hardly a surprise really.
Yes, the mortgage scheme may have been inefficient and, yes, the last government probably got its sums wrong. But let's look at the whole thing in perspective.
In spite of the terrible consequences of banks offering mortgages to people that could not afford them, the number of repossessions was far lower than forecast by the Council for Mortgage Lenders, and lower than during the housing market collapse of the early 1990s.
In November 2008, the CML predicted that repossessions would reach 75,000 the following year (a similar number to 1991). In the event, 47,900 homes were repossessed in 2009 and a further 36,300 in 2010. This was not only due to the mortgage rescue scheme, but other efforts to dissuade lenders from turfing families out of their homes, for which the last government deserves praise.
Strangely enough, nobody from Labour came forward this week to defend the scheme or the previous government's efforts to reduce repossessions. Are they so keen to wash their hands of Gordon Brown and his legacy that they are unwilling to snatch even a little credit when it's due?
Thursday, 26 May 2011
Wednesday, 18 May 2011
Exactly who is going to benefit from these cuts?
Governments of all colours should start to feel uncomfortable when they are accused of neglecting the vulnerable. For Conservatives of a certain age, it is not exactly a new experience but, for most Liberal Democrats, one assumes we have reached a slightly worrying phase that may leave them wondering exactly why they went into politics in the first place.
OK, so welfare reform was never going to be easy. But nearly a year after Work and Pensions Secretary Iain Duncan Smith embarked on his mission to make work pay by punishing those that can't find jobs (or in a few cases don't want to), pressure on ministers to justify their actions is starting to mount.
First there was the flurry of criticism surrounding new caps on housing benefit for tenants in private rented accommodation that even managed to anger London Mayor Boris Johnson. Then came the climbdown over plans to penalise people on job seeker's allowance by cutting their housing benefit if they did not find work after one year.
Now Liberal Democrats are criticising the proposed overall benefits caps that would mean an individual household could not claim more than £26,000 per year from 2013. Finally, the National Housing Federation has joined disability groups in attacking planned under-occupancy rules that may mean people with disabilities who have had adaptations made to their home are forced to move to smaller properties.
During the next few years, housing associations will witness the effects of benefit cuts and other welfare changes first hand. According to the NHF, association tenants will lose an average of £14 per week, or £728 per year. Not only will households struggle to make ends meet on less money but, as landlords, associations will be charged with chasing rent arrears (which are almost certain to increase) and deciding when, as a last resort, families should be evicted.
It is not a pleasant prospect, which makes the lobbying that is going on present during the passage of the Welfare Reform Bill especially vital. For if housing professionals don't join MPs in pressing for changes soon, it may be too late to protect those that are least able to cope with the fallout from an economic crisis for which they, of all people, were not responsible.
OK, so welfare reform was never going to be easy. But nearly a year after Work and Pensions Secretary Iain Duncan Smith embarked on his mission to make work pay by punishing those that can't find jobs (or in a few cases don't want to), pressure on ministers to justify their actions is starting to mount.
First there was the flurry of criticism surrounding new caps on housing benefit for tenants in private rented accommodation that even managed to anger London Mayor Boris Johnson. Then came the climbdown over plans to penalise people on job seeker's allowance by cutting their housing benefit if they did not find work after one year.
Now Liberal Democrats are criticising the proposed overall benefits caps that would mean an individual household could not claim more than £26,000 per year from 2013. Finally, the National Housing Federation has joined disability groups in attacking planned under-occupancy rules that may mean people with disabilities who have had adaptations made to their home are forced to move to smaller properties.
During the next few years, housing associations will witness the effects of benefit cuts and other welfare changes first hand. According to the NHF, association tenants will lose an average of £14 per week, or £728 per year. Not only will households struggle to make ends meet on less money but, as landlords, associations will be charged with chasing rent arrears (which are almost certain to increase) and deciding when, as a last resort, families should be evicted.
It is not a pleasant prospect, which makes the lobbying that is going on present during the passage of the Welfare Reform Bill especially vital. For if housing professionals don't join MPs in pressing for changes soon, it may be too late to protect those that are least able to cope with the fallout from an economic crisis for which they, of all people, were not responsible.
Thursday, 5 May 2011
It may not be worth joining the queue for social housing.
Amazing. You wait years for a programme about council housing to be shown on TV, and then two come along at once. Following last month's excellent history of council housing on BBC 4, this week we had Panorama on the acute shortage of social housing and the way that some people with homes cheat by sub-letting them at a hefty profit.
The difficulties facing families looking for a reasonably-sized council or housing association property is not exactly news. However, it clearly demonstrates how Labour failed miserably to ensure that sufficient new council homes were built during the 13 years it was in power.
What was illuminating is how councils such as Portsmouth actively dissuade families and individuals with little chance of getting a home from remaining on the waiting list, so reducing the figures by thousands. If other authorities are doing the same thing (and why wouldn't they?), the estimate of how many people are waiting for social housing may in fact be an underestimate.
The unlawful subletting of council and housing association properties is, of course, a major issue that most social landlords are addressing and probably requires even greater scrutiny. But of greater concern at present is how the shortage of social or affordable housing is going to be tackled when so little government money is being spent on new homes.
Earlier this week, the deadline passed for housing associations to bid for grants from the Homes and Communities Agency to help them fund new homes that will be let at up to 80% of market rents. So-called 'affordable renting' is now the only game in town so far as government-funded house building is concerned. This means people that can only afford cheaper, social, rents will have to make do with existing homes that are re-let, assuming landlords are not tempted to increase rents on these properties as well.
At the same time, some councils have told housing associations they will not support bids to build homes for affordable renting in their area, especially if the people moving into them are offered fixed-term tenancies lasting as little as two years.
It is not an encouraging picture. In some ways, it might seem reasonable that families who can afford higher rents (and only require state-subsidised housing for a few years) pay more and accept a fixed-term tenancy. But there is no indication of where the next generation of social housing is going to come from, or who is going to house the most needy as the supply of existing homes slowly dwindles.
Programmes such as Panorama can help by bringing the issue to public attention, but whether anyone from the coalition government or the Department for Communities and Local Goverment was watching and is willing to take action remains doubtful.
The difficulties facing families looking for a reasonably-sized council or housing association property is not exactly news. However, it clearly demonstrates how Labour failed miserably to ensure that sufficient new council homes were built during the 13 years it was in power.
What was illuminating is how councils such as Portsmouth actively dissuade families and individuals with little chance of getting a home from remaining on the waiting list, so reducing the figures by thousands. If other authorities are doing the same thing (and why wouldn't they?), the estimate of how many people are waiting for social housing may in fact be an underestimate.
The unlawful subletting of council and housing association properties is, of course, a major issue that most social landlords are addressing and probably requires even greater scrutiny. But of greater concern at present is how the shortage of social or affordable housing is going to be tackled when so little government money is being spent on new homes.
Earlier this week, the deadline passed for housing associations to bid for grants from the Homes and Communities Agency to help them fund new homes that will be let at up to 80% of market rents. So-called 'affordable renting' is now the only game in town so far as government-funded house building is concerned. This means people that can only afford cheaper, social, rents will have to make do with existing homes that are re-let, assuming landlords are not tempted to increase rents on these properties as well.
At the same time, some councils have told housing associations they will not support bids to build homes for affordable renting in their area, especially if the people moving into them are offered fixed-term tenancies lasting as little as two years.
It is not an encouraging picture. In some ways, it might seem reasonable that families who can afford higher rents (and only require state-subsidised housing for a few years) pay more and accept a fixed-term tenancy. But there is no indication of where the next generation of social housing is going to come from, or who is going to house the most needy as the supply of existing homes slowly dwindles.
Programmes such as Panorama can help by bringing the issue to public attention, but whether anyone from the coalition government or the Department for Communities and Local Goverment was watching and is willing to take action remains doubtful.
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