Government's housing and jobs figures don't add up

[The Prophet]

The government's promise of providing 200,000 new homes with 400,000 new jobs has been described as "optimistic - verging on the far-fetched" by Jim Pickard in the FT. In addition, a minister has confirmed these figures have not been given any time frame "no one has said that this will be achieved within a year or two, or even in the life of this parliament"

"Right to Buy" encouraged
Council house residents are to be offered bigger discounts to encourage and increase the take up of the existing "right-to-buy" scheme. It is hoped this will in turn generate funds to build new social housing on a like for like basis. The right-to-buy scheme has led to a fall in the available social housing stock, with a current waiting list of about 5million individuals needing housing. The number of Right-to-buy deals last year (3,000) were a result of a slowdown due to residents now typically paying around 90% of the market price for their home.  In the mid-90s, discounts of around 30% were available generating around 30,000 sales each year.

Due to deep cuts in the social housing budget, any replacement homes will need to charge higher rents at up to 80% cent of the market rate. It is highly probable that tenants in the newly-built social housing will struggle to pay this - even with the support of housing benefit.

"Free" Land for house builders
The "build now- pay later" scheme could result in 100,000 new homes being built on state-owned land by 2015, with no initial cost to developers. By giving away public land to housebuilders – and only taking payment once the homes are sold – the government is hoping to revive the troubled industry. But how much of this land will be in areas where people actually want to live? This "initiative" will not change the deep rooted, fundamental problems facing the house building industry, namely that there is currently very little credit available for house builders to build speculative developments and there is less desire by lenders to provide mortgages for either first time buyers or buy-to-let investors.

[Philofacts]

"Right To Buy"
In 2003 LABOUR capped Right-to-Buy discounts at £16,000 for all homes in the 41 areas with the highest demand for social housing.

David Cameron says he wants unused public sector land used for new housing.
However, in inner London such sites are few and councils will find it hard to find land for the social housing needed to replace the right to buy.
In areas where house prices are lower, another problem arises. A four-bedroom 1950's semi-detached house in Huddersfield could be sold for £100,000,
yet it would cost around £138,000 to build a like for like social housing replacement in the same area.