How to make the housing situation worse – basic finance

Labour-Party-Manifesto-2015On listening to Ed Miliband launch the Labour Party’s election manifesto on 13 April, I despaired. Like in the time of Blair in 1997, Miliband is committing the Party to an austerity programme that is false. It is a construct of the Conservative neo-liberals who want to roll back the state and are using the deficit as a justification.

So when it came to David Cameron, the following day, launching the his party’s manifesto, I  had noConservative-Party-Manifesto-2015 real expectations. But they were met, nonetheless. Back in the 1980s, Thatcher forced local authorities to sell their public housing at a discount to tenants under a programme called Right to Buy. Gradually, but surely, this policy reduced and denuded the public housing stock and made a lot of people wealthy. And they were not the people who bought them, necessarily.

We’ve since had help-to-buy, a dangerous incentive to people unable to buy because of the inflated price of property relative to incomes and the deposit levied by lenders. The Government will now subsidise the deposit for applicants. This further inflates house prices and subverts the whole point of deposit guarantees. And largely because of the Conservative Party’s policies and dogma associated with ownership.

And now what might we have? A Conservative Government would force Housing Associations, the privately-owned successors to local authorities charged with building and managing housing for eligible people largely disenfranchised from market housing provision, to sell, at a discount, these dwellings.

It seems that austerity does not apply when the Conservative Party is building its own constituency (or making war). Essentially the policy represents a money transfer to its own supporters (or anticipated supporters). Notwithstanding the immorality and legality of this, the policy is finance madness. Let me get this right, Housing Associations take out loans to build dwellings. Having built them, they sell/part sell a few and rent out the rest. They then go back to the banks and borrow more money with these dwellings as security. Take away this security and the banks will not lend, or certainly not cheaply. The whole model collapses. Genius.

These Conservatives are vile.

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