Greenwich Council now using taxpayer money to pay mortgage deposits
Greenwich Council leader Denise Hyland yesterday tweeted about a Meridian Home Start scheme building new homes.
All very good. Meridian is the council created housing developer that can build homes instead of the council doing so directly thus avoiding government caps. It’s not perfect but probably the best option right now.
A popular misconception is that councils can build new homes when they’ve faced heavy restrictions that limit numbers to very low amounts. That’s been the case since the early 1980s through Thatcher, Major, Blair, Brown, Cameron and now May.
Just last week the cross-party Treasury committee recommended the cap on councils be removed.
Meridian Homes
Until that happens other measures must be taken, and one of those is utilising arms-length housing developers. In Greenwich that is Meridian Homes.
Plus, homes built under Meridian cannot be sold through Right to Buy.
Greenwich Council have actually built little using Meridian Homes since its inception in 2011, and even now the pipeline of projects is modest compared to most authorities in London.
Last night Bexley Council were discussing their version of Meridian named Bexleyco (more of that in future posts) and are looking at building up to 2,000 homes.
In other parts of London thousands have already been built.
Despite limited building in Greenwich Borough with Meridian, a bit of a PR drive by the council on building homes is underway hence the tweet which was re-tweeted by other senior local Labour politicians, but then in the tweet the council leader adds that the council, aka local taxpayers, will give people £1 for every £1 they save for a mortgage deposit up to £10,000.
What?
Like Help to Buy, this will only push up prices reducing affordability for many. Help to Buy has been routinely criticised for increasing developer profits by substantial amounts and pushing prices ever higher.
Help to Buy already exists so why spend money locally on this? To attach a local boost to damaging national factors?
At Rochester Way site called Jack’s Acre marking the start of building 29 Affordable Rent properties by Meridian Home Start. Families who rent and save will get £1 from MHS for every £1 they save to a max of £10k to use as a deposit when they move on to buy their own home. pic.twitter.com/KKnV5PsNtE
— Cllr Denise Hyland 💙 (@CllrDHyland) January 29, 2018
Every penny available to the council should be spent on providing new truly affordable housing not paying peoples mortgages.
The plan is to get people moving out of Meridian Homes on a routine basis and then free them up for people waiting for affordable homes.
Yes, it sorta makes sense, but ultimately building new homes using all sources of funding would provide more housing which will help more people and provide a local, long-term asset.
Giving someone money for their deposit merely helps that one person or family (along with banks and housing developers).
Buying market homes
Just last week we also saw how Greenwich are spending £65 million on buying existing homes instead of building new ones due to a continual failure to plan ahead and spend income. Good news for local estate agents.
And now this. Why are Greenwich Labour intent on pushing up prices? Pushing up demand with limited increase in supply has consequences.
And why won’t they commit to putting information about their £65 million home buying splurge in the public domain?
What and whose homes are they buying? Are they paying actual market rates and driving a hard bargain? What estate agents are they using? How much commission are they paying? So many issues of accountability and transparency are raised by the scheme.
It’s pretty astonishing that in a time of severe housing need causing much harm that a Labour council is not using every option and power to build affordable housing but pushing these other schemes.
And of course building outright provides much employment for builders and could use GLLab to train workers.
Building new affordable homes through Meridian should be their absolute priority.
Private renters
And what a kick in the teeth for private renters in the borough paying very high levels of rent. A small 3 bed house in a place like Charlton can cost £1600+ a month.
Many are paying high rents each month plus council tax and now seeing that council tax go towards paying mortgage deposits of a lucky few who already live in cheaper housing with secured tenancies.
If those renting privately even manage to save for a deposit given high rents they then have to compete against those being helped.
Then there’s the knowledge that money isn’t being spent on building truly affordable rented housing that could perhaps have housed them in the future.
And even if not eligible for lower cost housing, the increased number of new builds would reduce competition for rents.
The housing policies coming out of Woolwich Town Hall have been misguided and unfair for a very long time. Despite rightfully criticising central government, far from enough action is being taken to help local residents with powers the council still have, with much funding being used is actually exacerbate severe housing issues locally.
Some will inevitably say that these schemes help some. Of course they do. But other schemes could help far more people for the same cost going by Greenwich Council’s own data and figures. A failure of planning and bizarre priorities are resulting in many people missing out.
Good article.
Small correction:
“That’s been the case since the early 1980s through Thatcher, Major, Blair, Brown,Osborne and now May.”
Should that be Cameron?
What’s the point in working hard these days? Its not a meritocracy.
Unless of wealthy stock, your average young person faces very high rents and house prices while working hard and doing the right thing.
Better to play the game and get maximum assistance. Get the state to pay. It’s awful but all these policies encourage it. Try to work hard and save and get no help in London. Help to Buy is a cruel joke. A loan on a house that’s 15 times a good salary.
Have 3 children, make sure only 1 out of 2 parents work (maybe just part time) and get secure cheaper housing and now mortgage help.
No one else is getting truly affordable housing as governments are pissing it away on things like that and not building.
As someone paying about 60% of my salary in rent each month, and not knowing if I will be able to stay longer than month to month as landlords can kick me out at anytime, its dismaying to see Greenwich Council not caring for people like us and spending huge sums on schemes like this.
Do they care a jot for the 25%+ in private rents. We have no secure rights and far less security than council and housing association tenants.
Instead of using their millions to build more affordable homes they’re popping to estate agents and paying huge sums and paying a lucky bunch of people’s mortgages? It’s sickening.
This isn’t a Labour council. It’s more blue than most blue Tory boroughs.
How many top Labour Greenwich councillors are multiple home owners you wonder? Have a look on their page showing interests and a fair few are. It says much about a desire to keep prices rising.
It’s social cleansing writ large. Local authorities up and down the country are only interested in building ‘dormitories’ and don’t seem to care that these sleepers will take their spending power elsewhere. The favoured retailers of the ‘moneyed’ – Waitrose and M&S have no interest setting up shop in these ghettoes.
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