As some of you will know I am pretty active on the new fangled social medium Twitter (@PeterMindenhall). A place where one can hunt down those responsible for press releases, statements and the like and ask them direct questions in the hope of gaining some clarification of what they really meant before the PR department got their hands on it.
Over the past few weeks I have been doing exactly that – badgering the UK Minister for Housing Grant Shapps in an attempt to provide some solid facts and figures regarding the Right to Buy and New Build Policies.
I have written several pieces regarding Government housing policies and suggestions, most of which have questioned the viability of the policies themselves, some have even gone so far as to label one as "Bonkers Suggestion of the Year"
Although I have had many questions and queries for the Housing Minister in the past – it is not easy to get a serious response from a politician whilst still being polite. Granted they are busy people, and Grant Shapps is a legendary super hero it would seem for his usage of twitter to reach out to the masses.
Finally though after much fishing – I got a bite! As a result of suggesting that questioning statistics from opposing shadow minister (Jack Dromey)....
is tantamount to throwing stones in a green house, and asking where his stats were on financial figures on Right to Buy:
I then made clear exactly what I was asking to see if I could get a definitive answer with the following:
Grant Shapps response was as follows:
Somewhat disheartened by the answer not containing any numbers, and no numbers to my knowledge on any press releases about either of the policies mentioned, I replied with the following very specific questions.
At that point it all went a little quiet for a few days with no response from Grant, despite the odd reminder tweet from me. I even tweeted Shadow Housing Minister Jack Dromey the same questions to see if that might prompt some activity – but alas, it was not to be.
To my surprise, late evening on Wednesday Grant posted the following update:
Subsequently, late evening yesterday...
Now I must admit, considering how occupied politicians in general are (or if not, should be!) I was very surprised to have got this far with the conversation – and despite my possibly stereotypical view that most politicians are useless and a waste of time – I must praise Grant Shapps at this point for him actually taking the time to respond to sensible questions rather than automating everything through a PR agency, and also on actually doing something that he said he would do – a trait rarely seen in the political world.
Unfortunately, renewed faith in the political world, whilst still with more belief in it than previously, waned rather quickly as a result of the statement published by the Housing Minister. Just a few paragraphs in, on the subject of "One for One Replacement":
"Drawing on evidence from the 2011-2015 Affordable Homes Programme, we are clear that it should be possible to fund new homes let at Affordable Rent levels, with no more than 30% of the cost of the new homes needing to come from the Right to Buy receipts. As in the Affordable Homes Programme, the remainder of the cost will come from borrowing against the net rental income stream from the new property, and cross-subsidy from the landlord’s own resources."
Now bear in mind this is only one paragraph from the statement, it, if anything makes the situation worse unfortunately on several counts.
- "we are clear that it should be possible to fund new homes"
Now regardless of actual numbers on costs and receipts (which I must add are nowhere to be seen in the statement) Shapps states firstly that "we are clear" only to then state "it should be possible" in the same sentence. Call me a literary Nazi if you will – but it's one or the other. If I walk into a bank to apply for a mortgage and when asked if I can afford the repayments I say "I am clear it should be possible" – I somewhat doubt I would have my loan approved.
The second horror from that paragraph is how the rest of the funding appears to work – "no more that 30% of the cost to come from Right to Buy" (and yet last autumn Shapps said "one new affordable home would be built for every home sold off"), followed by "the remainder of the cost will come from borrowing against the net rental income stream from the new property"!
So unless I have missed something here due to the overwhelming levels of disbelief in what I am reading, the sale of council houses under Right to Buy does NOT fully fund a new build property, but merely serves as a deposit, and the rest of the cash comes in the form of a loan against future (controlled) rental income?
Correct me if I am wrong, but I suspect I have come across this type of monetary juggling before? Ah yes – I seem to recall one or two banks thought they would try that, creating NINJA (No Income No Job and No Assets) mortgages and fuelling the Buy to Let market to the point of economic meltdown.
The only difference here is the UK government appears to hold the belief that quantitative easing will save the day, despite there being no notable occasions of it ever being a success previously.
Times are hard, we are in a recession. Throwing money around with financial smoke and mirrors and lending mumbo jumbo is not going to work.
On that note – credit where credit is due to Grant Shapps for following up with a statement on the subjects at hand – as for the statement itself, must try harder.