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Crisis responds to the Prime Minister’s Housing Pledges

Today, the Prime Minister had outlined a number of housing pledges which include extending the Right to Buy to housing association tenants and allowing housing benefit to cover mortgage payments.  

As it stands, the Government has frozen housing benefit for the last two years. Additionally, households on Universal Credit can save up to £16,000 but once they hit this threshold, they are no longer eligible for Universal Credit. Assuming households need to save a 15% deposit, this would enable them to buy a property for £107,000. With the average house price now £278,436 and the average house deposit sitting at £61,000, Crisis is warning this policy is completely unworkable.

 With over one million people languishing on social housing waiting lists, and over 96,000 households trapped in temporary accommodation, Crisis is also concerned that resurrecting the Right to Buy scheme will only further exacerbate the housing crisis. Last year, only 5,955 social homes were built in England.  

Crisis’ research shows that we need 90,000 social homes built each year for the next 15 years to meet the demand required.  

Responding to the announcement Kiran Ramchandani, Director of Policy and External Affairs at Crisis, said: “This ill-conceived announcement is the exact opposite of what we need to tackle the mounting housing crisis. For decades our social housing stock has been stripped bare, while over 96,000 people remain trapped in temporary accommodation having given up all hope of ever moving into a home of their own. The notion that we’ll now sell off what little affordable housing we have left will only serve to make this situation worse.  

"The reality is that with housing benefit currently frozen, it’s barely enabling anyone to rent as it is. To suggest this money can now be used to secure mortgages without a costly investment to the benefits system is an utter fallacy. Moreover, it seems the Government is intent on creating a two-tier system where only working households will be able to use their housing benefit towards a mortgage payment, disregarding people with disabilities and those unable to work.   

“The only way to fix our broken housing system is to build more social homes which people can afford – we urge the Government to get on with doing this if we’re ever going to end homelessness for good.”   

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BACKGROUND: 

  • The very maximum amount of savings that households on Universal Credit could save is £16,000; after this they are ineligible for UC. Assuming a 15% deposit, this would allow them to buy a property for £107,000. For context, the average house price in 2022 is £278,436.  
  • In practice, very few households would be able to save £16,000 towards a deposit (even if funded out of Local Housing Allowance) as Universal Credit starts to be tapered when household savings exceed £6,000; a loss of income that most households on UC won’t be able to afford. Assuming instead therefore that households can save a deposit of £6,000 (and again a 15% deposit); this would allow them to buy a property for £40,000.