14 May 2008 11:17
SO the rumours about a new housing market package were true. The details announced in today's draft Queen's Speech are still sketchy but it is clear that it will be on nothing like the same scale as its predecessor in 1992 - £200m not £577m to buy homes that will probably cost three times as much now means it's probably worth just 10% of that in real terms.
However, the same logic applies of acquiring homes for the social sector at the same time as preventing worse problems in the private sector. After Caroline Flint unwittingly revealed yesterday the government's view that house prices will fall by 5-10% this year and 'we can't know how bad it will get', action was clearly needed.
In fairness to her, it was actually a pretty sensible assessment of the state of the housing market - unless, of course, you're the housing minister on the way into a cabinet meeting.
The scenario painted in the snatched picture of her briefing notes (if you missed it, go here) would actually be pretty good news for the first-time buyers but the government cannot afford to contemplate the prospect of things getting any worse.
One temptation must have been to steal an idea from Tory policy advisor Kirstie Allsopp and scrap stamp-duty for first-time buyers. But quite apart from the fact that yesterday's tax cut must have cleaned out the coffers, that sounds like a fruitless way of spending government money if prices are going to fall and help first-timers out more without it costing you a penny.
But there are some other policies in the draft speech [PDF here] that also appear to come from the blue end of the wardrobe. The original housing market package was of course also a Conservative idea and making all first-time buyers eligible for shared ownership schemes subject to an income limit comes bears some distinct similarities with Boris Johnson's programme for London.
A statement from the CLG says all first-time buyers with a household income of under £60,000 would be eligible for Homebuy. Johnson's plan helps all basic rate taxpayers.
The details will be what matter. Where will the money come from (Gordon Brown suggested it would be reallocated)? What safeguards will prevent expanded equity becoming a route to negative equity for its customers? And how will this market package avoid some of the mistakes made last time?
On the last point in particular it could do worse than ask Anthony Mayer. Appointed yesterday as head of Oftenant, he was chief executive of the Housing Corporation at the time of the last package.
Elsewhere in the speech are plans to extend Oftenant to local authority tenants, a proposed housing reform green paper 'towards the end of 2008' setting out options to 'encourage people towards greater economic independence and social mobility', yet another review of housing benefit and reform of banking regulation.
Posted by Jules Birch, May 14
Posted in Housing market, Politics , Social housing, Welfare, Tenants