The government’s proposed plans to consider housing benefits as income towards a mortgage may be welcome in principle, but we must think carefully about the various practical challenges that this kind of policy will create.
Though the general idea of encouraging home ownership and social mobility among low-income people is important and necessary, the statement contains the problem: people on housing benefits are on low incomes, and – according to these plans – their benefits remain static though they are assuming the new burden of property ownership and its maintenance.
This means their existing outgoings will be increased to maintain a property, but their benefits won’t make allowances for this additional financial burden. In many cases, this will lead to vulnerable people being placed in an even more vulnerable position and a reduction on the quality and standard of living – in short, people on benefits are being set up to fail.
This difficulty will be compounded by the fact that these new homeowners may be forced to remain on benefits. Attempting to find employment would run the risk of having contracts terminated at the probation stage or offered a zero hours contract, delaying any return to the benefits ladder for as long as five months. Unsympathetic lenders may repossess during this period, leaving the owners potentially homeless.
And what does this policy mean for Local Councils and Housing Associations which are currently struggling to deal with the huge demand for affordable homes for low-income groups? Shouldn’t we work with them to bolster the supply of quality homes?
Taking a broader view, it’s also worth thinking about this policy in the context of the UK’s economic situation. We’re currently experiencing inflation exacerbated by the fuel crisis – and the government’s plan may well pour fire on this already raging flame.
Even without this inflationary backdrop, offering social housing tenants the right to buy needs to be accompanied by an increase in the public housing stock.
At base, however, the primary problem with this policy is that it’s an attempt to solve the wrong problem. The question is: how do you ensure that people are no longer reliant on housing benefits and able to afford their own home? That’s the current challenge – and this policy, though it may appear well-meaning, isn’t equal to the task of fixing it.
A realistic part of the solution is enabling existing tenants to become socially mobile so they can afford, and adequately maintain their own homes without diluting their standard of living. This can be done by ensuring that Local Councils and Housing Associations are able to provide enough quality affordable housing, that not only adheres to a higher standard but can also be delivered at a faster rate.
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