Plans to help lower-paid workers use housing benefit cash to buy homes will be announced later on Thursday so that more people can fulfil “an important desire of the human heart”, Michael Gove has said.
The levelling up secretary said the measure, as well as a relaunch of the right to buy scheme, would encourage more people to purchase their own property.
Both policies will be formally unveiled by the prime minister, Boris Johnson, at a speech in Blackpool on Thursday, as he seeks to move attention away from an embarrassing confidence vote result in which 41% of Tory MPs tried to oust him.
But Labour has said the plans will “make the housing crisis worse” by fuelling further demand without properly addressing supply shortfalls and will not help the poorest.
Gove confirmed reports that Johnson would let benefits claimants who receive housing benefit payments to “use that income in order to get on to the property ladder” in obtaining and sustaining mortgages.
The right-to-buy scheme, first launched by Margaret Thatcher, would also be extended following a pilot in the West Midlands, Gove confirmed. Given it was also touted by another previous Tory leader, David Cameron, in 2015, Gove admitted it was “an extension of policy that we already have”.
However, the cabinet minister told Sky News not everyone eligible would be able to use the scheme. He cautioned that “we will cap the number of people who will be able to benefit from this initially and then it will grow over time”.
In his speech later, Johnson is expected to say that he wants renters to be given the chance to buy properties they let from housing associations at discounts of up to 70% – depending on how long they have lived in them.
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Despite mounting calls from senior Conservatives for the government to bring forward tax cuts given unhappiness at the prime minister and chancellor’s approach to tackling the cost of living crisis, Johnson is only likely to make vague commitments to reducing the tax burden at an unspecified point closer to the next election.
Gove denied the government had been “idle” in tackling longstanding problems like helping people join the property ladder, despite the Conservative party being in power for 12 years and criticism over the dearth of new affordable homes. He also pledged that each housing association property sold off would be replaced “like for like, one for one”.
Labour said dramatically increasing the availability of affordable homes was the “only way to really solve the housing crisis for most people”.
Lisa Nandy, the shadow levelling up secretary, said the government’s plans would “make the housing crisis worse” and had not been thought through. She told Sky News: “In principle, it’s a great idea to try to get more people the security of their own home, particularly people who find themselves in the benefits system.
“The problem is that, as always, the government has not thought through the detail. There’s no sign that any of the lenders are onboard with this. The government can say that it wants to open up mortgages to people on housing benefit, but unless the lenders agree to do it, it’s not going to happen.
“There are real practical problems as well: to qualify for universal credit, you’ve got to have savings of less than £16,000, which means that most people who the government are trying to reach with this announcement are not going to have anything near the amount that they need for a deposit on a home in order to qualify for that mortgage.”
Nandy added that Labour would “crack down on unfair leasehold charges” and take “more action to increase the supply of affordable homes”.