Housing benefits will be used to buy homes, PM pledges

Lower-paid workers will be allowed to use their housing benefits to buy homes, the prime minister will promise today. In a speech today the prime minister is expected to say that he wants to change the rules so people can use welfare payments to get mortgages and make monthly payments. He will argue that the £30bn in housing benefit that goes towards rent would be better spent in helping people to become first-time buyers. Boris Johnson will also try to emulate Margaret Thatcher by announcing plans to extend the right to buy to people who rent from housing associations. He will say that he wants to give millions of people the chance to buy their properties at discounts of up to 70% of market price, depending on how long they have lived there. An uncapped programme could cost the government £3bn a year, however the initiative is likely to be limited to a series of pilot schemes because the costs will have to be met from existing government spending, without additional funding. Sources say the cap is likely to fall at £500m. It is understood the plans will include a pledge to replace every housing association property that is sold to ensure stock is not depleted. In England in 2020-21, 2.4m households rented from housing associations and 1.6m from local authorities. This total of 4m represents 17% of all households. Johnson is also expected to announce a review of the mortgage market to see if there are ways to reduce people’s deposits. Toby Lloyd, who was Theresa May’s housing adviser in Downing Street when the same plan was dropped, said the resurrection of the idea seemed “like a political positioning statement in terms of headlines, instead of a properly worked through policy”. The Times (£) The Guardian