Central government and affordable housing

My column in this week's Cornish Guardian covers the topic of affordable housing. It went as follows:

The Thatcher Government of the 1980s did great damage to the fabric of British society when it sanctioned the sell-off of thousands and thousands of council houses.

Many individual families may have benefited from the sales, but the greatly reduced public rented sector failed to mitigate against the massive increase in house prices and rents experienced over the last decade or so.

It is now a reality that many hardworking families, making do on low local wages, are finding it difficult to buy their own homes. And more and more families are struggling to meet their rent payments in the private sector, while paying a higher percentage of their income than ever before to simply keep a roof over their heads.

The possibility of a “council house,” with a secure tenancy and an affordable rent, remains the main hope of a fair future for many.

All political parties routinely express their full support for the delivery of affordable housing. But what has happened since the General Election, just one year ago?

The Coalition Government has slashed investment in new affordable homes citing the present economic problems, but it is also making changes of great significance.

Most existing properties owned by Cornwall Council or Registered Social Landlords (RSLs), such as Ocean Housing, are rented out at “social” rents considerably below those of open-market properties.

But the Government has introduced a new concept of “affordable rent” – which it considers to be 20% below the extremely high levels of open-market rents.

They have also announced that rents for newly-built properties, as well as re-lets of existing properties, should be at this higher level.

This price hike means that new tenants will end up paying more, while the increased costs will almost certainly lead to a higher cost in housing benefit payments for the Government. How counter-productive!

At the same time, the Government is planning to reduce the long-term security of tenure for residents in Council and RSL properties, undermining communities in the process.

Councils and a range of organisations are continuing to bring forward new affordable homes for local people. Many of these are homes sold at a discount or homes which are part-buy and part-rent.

And yet, this work is being undermined because many banks and building societies, including some owned by the Government, are refusing to give mortgages for affordable homes on numerous schemes.

It is my view that the Government has got it wrong. It needs to rethink its approach to affordable housing, but it must also take action with the banks to ensure mortgages for hardworking local families.