Boris Johnson to announce plan to let low-earners use housing benefit to buy homes

Boris Johnson is expected to reveal plans to let people to use their housing benefit to help get on the property ladder, as part of a set of announcements aimed at easing the housing crisis.

The prime minister is set to argue that this money would be better spent helping people buy their own home than on paying their rent – in a policy dubbed “benefits to bricks” by one minister.

Confirming the plan on Thursday, levelling up secretary Michael Gove told Sky News: “One of the things we’re looking at is a way people can save explicitly for home ownership … We are looking specifically at a saving vehicle in order that people [on benefits] can save for that deposit.”

But the cabinet minister suggested that benefit recipients in London and the south-east may still struggle to get on the property ladder.

“There will be many people in the north, Midlands and the south-west who will be well able to get on the property ladder using the amount they earn and receive in universal credit,” Mr Gove told LBC.

In a speech in Lancashire, the PM is also expected to confirm plans to extend the right to buy to housing association tenants, a review of the mortgage market to look for ways to reduce people’s deposits, and may declare plans to construct “flatpack” homes.

According to The Times, the government wants tenants the ability to buy for housing association properties at discounts of up to 70 per cent – though it is likely to be limited to a series of pilots for now, without additional government funding.

But Mr Gove rejected the figure – and admitted that there would be a cap on the number of housing association tenants who will be able to benefit from right to buy extension.

He did confirm that there was no new money committed for the scheme, telling Sky News: “It will come from the overall parcel, the overall envelope of government spending. We expect that we will cap the number who will be able to benefit from this initially, and then it will grow over time.”

Asked what the discount would be, Mr Gove told LBC: “It will depend how long you have been in the home. I don’t think we’ll be offering 70 per cent discounts for our housing association right to buy … We’re not proposing to offer discounts at that scale.”

Mr Gove promised that the government would commit to replace social homes sold off “like for like” – but Labour and housing charities have pointed to the huge cost of building new homes sold off at a discount.

Conceding large sums of money would be needed, the levelling up secretary said “we want to be able to have the resources to fund a programme of this kind”.

Gove also claimed on ITV’s Good Morning Britain that social housing would be produced “instantly” to replace homes bought by low-earners.

He added: “We want to be in a position where we’re increasing social homes … and ensuring that in the stock of social homes as people move from renting to ownership so that we replace those numbers as well.”

Labour has previously branded the right to buy scheme “desperate”, pointing out that it repeats a policy from David Cameron’s 2015 Conservative Party manifesto which failed to deliver.

Shadow cabinet minister Lisa Nandy has said the latest housing plans will “make the housing crisis worse”, telling the Today programme: “We should be taking more action to increase the supply of affordable homes.”

She added: “By their own reckoning, this will help a few thousand families a year. For those families that will be very welcome, but if it makes the housing crisis worse for everybody else, I’m not sure why they wouldn’t come forward with a proper plan that actually starts to increase the supply of affordable housing.”

Shelter’s chief executive Dame Polly Neate said the “hare-brained idea” was “the opposite of what the country needs”, warning: “There could not be a worse time to sell off what remains of our last truly affordable social homes.”

Labour frontbencher Jess Phillips was also among those questioning how the benefits-to-buy policy will work because individuals with more than £16,000 in savings do not qualify for the benefit. “It’s almost as if Boris Johnson doesn’t do much benefits casework,” she quipped.

Mr Gove suggested the £16,000 limit would not apply. “We’re looking at using some of the existing savings vehicles we have so that people can specially save money in order to qualify for a deposit … and have those savings disregarded when it comes to benefit claims,” he told TalkTV.

According to a preview of Mr Johnson’s speech handed out by Downing Street, he will also pledge that in “the next few weeks, the government will be setting out reforms to help people cut costs in every area of household expenditure, from food to energy to childcare to transport and housing”.

The prime minister will also promise “to cut the costs that government imposes on businesses and people up and down the country” – despite his prior tax hikes.

“We have the tools we need to get on top of rising prices,” Mr Johnson is expected to say.