Homelessness and Mortgages

Part of Opposition Day – in the House of Commons at 4:41 pm on 16th November 1992.

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Photo of John Battle John Battle , Leeds West 4:41 pm, 16th November 1992

The hon. Gentleman is missing the point that, for months, all the housing associations and the private housing finance world have spelt out to the Government that 67 per cent. is the bottom line. Below that point, schemes will not go ahead.

I hope that the hon. Member for Colchester, North (Mr. Jenkin) will join me in pressing the Minister to make available the report on affordability which was prepared by the Housing Corporation and which now rests in his Department. I am pretty sure that it reveals that housing associations are being forced to push up rents, which makes schemes unsustainable. The net result is that housing associations can only take tenants who can guarantee that they are on full housing benefit. If they cannot, they will not get a place.

I urge the Minister to make the report available so that it can be discussed and the figures can be worked through in those terms. By changing grant relationships and by not taking account of housing benefit changes, the Government are pricing people out of even housing association housing, yet the Government insist that housing associations—and only housing associations—should provide affordable housing.

Special capital grant approvals are to be cut from 75 per cent. to 60 per cent. That means that for improvement grants to be paid at all to hard-up owner-occupiers, local authorities will have to meet 40 per cent. instead of 25 per cent. of the cost. We had hoped that there would be some reference in the autumn statement to the problems that local authorities face in terms of mandatory grants. The whole of their housing investment programmes could be consumed by the demand for improvement grants, yet the Government seem simply to be turning a blind eye. I urge the Minister to look again at mandatory grants and at their impact on local authorities' ability to serve housing needs in the round.

Let us look in slightly closer detail at the £750 million package to take 20,000 properties off the market through acquisitions by housing associations. We believe that that is inadequate when almost 250,000 properties either have been repossessed or were unsold in the first place. On BBC News on 12 November, John Wrigglesworth of UBS Phillips and Drew referred to the sum as a snowflake on an iceberg". Although the scheme is limited, the Government could sharpen it and substantially improve it.

Can the Minister assure us that the available money will go only to mortgage lenders who are running or who are about to set up mortgage rescue schemes? Why is the money not tied in so that there can be real and workable mortgage rescue schemes? That would make the money go further, as properties would not just be taken off the market. We would be reassured that repossessions would slow down, which would in turn prevent more repossessed houses coming on to the market. Why not link the scheme so that it does not simply reward lenders who repossess but goes some way towards keeping people in their own home?

Surely the same grant rates should apply to those schemes as they do to any other schemes funded by the Housing Corporation. Lower grant rates will simply lead to unaffordable rents and to dwindling housing association involvement in the scheme. In practice, the scheme is too inflexible. Some lenders may want to lease properties rather than to sell them outright. Why cannot the Government relax leasing restrictions on local authorities and on housing associations, and allow 20-year leases? There should be a combination of buy-back and leasing.

It is not clear whether the properties that are in disrepair or have been vandalised are to be included in the scheme. It is now evident that many properties that have been repossessed are in a terrible state. It is estimated that 100,000 repossessed properties standing for sale are in a poor condition and increasingly are being vandalised. Although lenders should bring properties up to standard, why do the Government not allow previously rundown properties to be included in the scheme as long as the lender agrees to do the necessary improvement work to bring them up to scratch, so that people can move into them?

Why cannot local authorities be given a guarantee of first refusal so that they can use the properties for homeless families? There would then be a direct link between cutting temporary accommodation bills and bringing the properties back into use.

What do we find for local authority tenants in the small print of the autumn statement? We find that council rents are to be forced up by 9 per cent. in the coming year—more than twice the rate of inflation. It will mean an average of £2·50 on everyone's rent. The Government then tell us that there is no problem of people being priced out of their homes. The measures in the autumn statement will have that effect and will force people into debt and insecurity. How can people exercise their rights if they find that they are increasingly in debt and unable to meet the primary demand to pay the rent? The Government fail to help not only those with mortgages, but those with rents.

There was no housing windfall in the autumn statement. Many homeless families, tragically, will still face a cold and bitter winter. There is no real evidence that the Government take the housing crisis seriously. Perhaps in the coming months they will listen to the lobby of the tenants and of the churches which is coming to the House. In the meantime, the autumn statement is part of the Government's clear strategy of simply putting off what they cannot bear to face today because it is politically embarrassing. We are not being presented with a new policy. It is simply a time-buying exercise to get the Government into the calmer waters of less hostile headlines.

As homelessness and unemployment inexorably rise, the Government's pitiful failure to recognise and to take seriously the scale of the housing crisis will become plainer for all to see. We intend to keep the spotlight on the Government's lack of housing policy. We continue to monitor initiatives that constantly prove ineffectual. We shall continue to press for emergency measures to tackle street homelessness not only in London but elsewhere. I remind the Minister that rough sleeping is no longer confined to London.

We shall press for real measures to revive the housing market and we shall continue to demand that people have the right to rent. We shall harass the Government in detail until our society is a lot closer to ensuring that everyone's right to a decent, appropriate and affordable home is realised. The Minister's great claims today for his Government's minuscule measures will not even stand the test of this Parliament.