Housing: Owner Occupiers (Hansard, 28 November 1991)

§ The Minister of State, Department of the Environment (Baroness Blatch)
My Lords, people 1401 who own a house have either inherited or bought it. All buyers qualify for mortgage interest relief up to £30,000 on their sole or main residence. Secure tenants of public authority housing who exercise the right to buy also have the advantage of buying at less than market value. Prospective buyers should take advice before committing themselves, and should consider shared ownership if they cannot afford to buy outright.

§ Lord Dean of Beswick
My Lords, I am grateful to the Minister for that reply. In 1979 2,500 houses were repossessed. In 1989 the figure was 16,000 and it is predicted that 115,000 to 120,000 houses will be repossessed this year. Those houses belonging to owner occupiers have been repossessed as their owners cannot meet their commitments. The figure of repossessions for this year represents a fortyfold increase. It appears that the Government have managed to organise a slaughter of the innocents with regard to the owner occupied sector.
The Minister has referred to the sale of council houses. Sympathetic financial treatment is being meted out to council house tenants. Some of those tenants are now receiving £40,000 and £50,000 discounts when purchasing their houses. In real terms that represents a subsidy of £80 to £100 a week on their mortgage repayments. Where is the equal society that the Prime Minister talks about when the purchase of properties is loaded so heavily in favour of one section of society? Will the Government give the same sympathetic treatment to those in the owner occupied sector as they mete out to those who buy council houses''

§ Baroness Blatch
My Lords, the noble Lord commented on financial protection for prospective buyers or home owners. I have to assume from what the noble Lord has said that he is critical of the right-to-buy scheme. He also appears to be critical of the extent to which people who enter the right-to-buy scheme receive discounts. The discounts are calculated according to the value given to a house as a vacant properly on the open market. That is not the case with council housing. A council house represents a secured tenancy and as such is worth little to a local authority. We are discussing whether those houses should be sold. If the discount is reduced, fewer people will be able to afford to purchase council houses. It is our view that home ownership should be extended to as many people as possible.

§ Lord Dean of Beswick
My Lords, that is precisely why I have asked that the sympathetic financial arrangements offered to local authority tenants should be extended to those in the private sector. I am not asking the Government to stop the sale of council houses. However, I must ask the Minister again whether she is aware that the subsidy given on the purchase of a council house amounts to £80 to £100 a week. I do not begrudge council tenants that subsidy, but I believe that similar treatment should be meted out to young people who are being evicted from their homes, probably for ever. Often those houses are the first houses those young people have been able to buy. 1402 All I am asking is that the Government should try to achieve the fairer society about which Mr. Major talks.

§ Baroness Blatch
My Lords, much is being done to help first-time buyers. There is a raft of shared ownership arrangements of which first-time buyers can make use. The economy is now more buoyant and inflation has been reduced, as have interest rates. Those factors also make it easier for young people to purchase houses. However, unless one considers reducing the discount offered to people who wish to buy council houses, a policy that offers financial help to anyone who is below a certain income to enable him to buy a house simply cannot be afforded. Perhaps the noble Lord is suggesting that such a policy will appear in the Labour Party manifesto. However, that would fly totally in the face of what the Shadow Chancellor is saying in another place.

§ Lord Stoddart of Swindon
My Lords, do not the Government have some duty as regards existing owner occupiers, particularly young people? Is it not the case that many of those young people were lured into buying houses that they could not afford by the availability of double mortgage income tax relief? Were not the lending institutions irresponsible, and encouraged to be so by the Government, in lending too much money to people who could not afford the repayments?

§ Baroness Blatch
My Lords, the noble Lord's final point is important. People should take as much advice as possible before entering into the purchase of a house. However, I maintain that to give a subsidy to anyone below a certain income who wishes to buy a house anywhere in the country would be a new and expensive burden on the taxpayer. If the noble Lord is advocating that policy, I must ask him from where the money is to come. In the meantime much is being done to help young people purchase property. As I have said, there is a raft of measures available which vary from enabling someone to be the shared owner of a property to enabling him to be the full owner of a property.