The New Feudalism (2)

From the BBC:

A new not-for-profit lending scheme is being unveiled aimed at giving manageable loans to financially excluded people. A pilot scheme has been set up in the West Midlands called My Home Finance, in the hope of diverting people away from borrowing from loan sharks. However, the interest being charged is higher than the maximum by law that credit unions can charge. It will charge 29.9% APR in the pilot scheme, rising to 49.9% APR in April...

My Home Finance has been set up by the National Housing Federation (NHF), with 10 branches opening as part of the pilot project... The pilot scheme is being launched by Work and Pensions Secretary Iain Duncan Smith on Thursday. The "vast majority" of the set-up costs for the scheme have been met by the Department for Work and Pensions, according to the NHF. There has also been input from local housing associations and the Royal Bank of Scotland.

Please note that all of the parties involved are branches of government or are controlled by the government and financed by the taxpayer - the National Housing Federation is just the umbrella lobbying body for Housing Associations, who are in turn creatures of legislation and financed by the taxpayer (whether they do a better or worse job at providing 'affordable' housing than local councils is a separate issue), and this whole concept of 'living within your means' appears to have been lost in the mists of time.

The Leaders' Debate (2)

Nope. Still no inspiration. So here's a nice little article from the London Evening Standard singing the praises of Home-Owner-Ism and explaining how it helps to create a free and fair ociety:

Young Londoners are giving up hope of buying a property before middle-age with prices up to 30 times average income, a survey reveals today. More than half of first-time buyers in London expect to wait at least 10 years before investing. A further six per cent — one in 12 — say they will not be able to afford to buy before 2030, according to the YouGov survey of Londoners aged 18 to 30.

As the political parties pledge to support home ownership, 37 per cent of young Londoners said they would delay starting a family if they could not buy a home, and 22 per cent said they would put off getting married...

Belinda Porich of the National Housing Federation*, which commissioned the poll, said: “Young Londoners are giving up hope of ever being able to afford their own home before middle age.”

Affordability is particularly acute in the capital with house price to earnings ratio ranging from 8.5 in the cheapest borough, Barking & Dagenham, to 29.5 in Kensington and Chelsea... Of the young people surveyed, 58 per cent said they would need help from relatives to buy. More than half thought they would need at least £10,000 as a deposit and 11 per cent said it would be more than £40,000.

* To be fair, the NHF is quango, being the umbrella group for Housing Associations, who enjoy generous taxpayer support and tax exemptions while having much the same freedom of action as commercial developers or landlords and, unlike local councils, a more or less complete absence of democratic control, so the responses are bound to slightly exaggerate the situation.

Yeah, like that's going to happen ...

From The Metro:

Millions of housing association tenants are being asked to forego an expected rent reduction to help avoid a shortfall of new properties.

The National Housing Federation (NHF) has warned that even a small drop in rental income could see thousands fewer new homes being built as services get squeezed. Rent rises for tenants are linked to inflation measured by September's retail price index (RPI). It is expected to fall to minus 1.7% for July and remain around that level for some time to come.

Ruth Davison, NHF campaign director, said the impact of a 2% reduction would cut the number of homes that could be built next year by 4,000 at a time when nearly five million people were waiting for council homes. "This is bad economics and bad politics," she told The Times...

Bleedin' heart quango asks for more money *yawn*

From the BBC:

More than 2.65 million people in England will be forced to live in overcrowded conditions by 2011, a campaign group has warned. The National Housing Federation says the number will increase by 15%, a rise of 350,000 people, as unemployment soars during the recession...

NHF chief executive David Orr said it was essential to continue building new family homes during the downturn. He said: "To prevent overcrowding reaching epidemic proportions, we believe the government should introduce a house-building fiscal stimulus in the Budget, with around £6.35bn being spent on constructing 100,000 new homes for social rent over the next two years...

The Department of Communities and Local Government said it was committed to major increases in the supply of affordable and social housing to meet the needs of families on waiting lists or living in overcrowded conditions. A spokesman said: "Along with an £8bn programme to deliver more affordable housing, we are providing a range of support to keep up the delivery of the homes this country needs..." The government was "constantly looking" at what more could be done to support the housing market in the current climate, he added."

Just a couple of points:

The National Housing Federation* is not a 'campaign group', it is the umbrella body of housing associations, which are in turn massive taxpayer-subsidised quangos. So it's hardly a surprise that the DCLG is singing from the same hymnsheet.

Why would a fall in incomes lead to 'overcrowding'? It's the same number of people and the same number of homes, isn't it? Provided prices fell accordingly, so that properties were not left vacant (which could easily be achieved by scrapping empty property discounts for a start), it would all sort itself out.

The government is caught in a cleft stick here: do they want to keep house prices up as far as possible? (yes), while at the same time expanding their vast empire of guangocracies and 'social' housing, which all things being equal, would push house prices down again? (yes). But seeing as their doing all this with our money, I don't suppose they care, it just leaves a bigger mess for the Tories to sort out.

* Not to be confused with The Homebuilders' Federation, which is a good old-fashioned industry lobby group, who are perfectly entitled to call for subsidies provided the government tells them to get stuffed.