Questions for Grant Shapps on Question Time

The housing minister is forced to stand in at the last minute as Baroness Warsi is "indisposed".

Baroness Warsi has withdrawn from tonight's edition of Question Time. Rumours are currently flying as to whether this is as a result of Mehdi Hasan's interview with her in this week's NS (full version not yet online -- go and buy and issue of the magazine) , in which she controversially states that Tory losses in "at least three seats" at the last election were "based on electoral fraud... predominantly in the Asian community", or whether she in fact pulled out days before publication, as government spinners seem to be putting about at the moment.

She will be replaced on tonight's programme by Grant Shapps, Conservative MP for Welwyn Hatfield, Minister of State for Housing & Local Government, and Question Time novice. We can only imagine the commotion in his office right now as he tries to prepare to face Simon Hughes, Diane Abbott, David Starkey and Brian Cox at about four hours' notice.

Surely, he will be asked about Lady Warsi's absence, and in particular the identity of the three seats she names in the interview. But there are questions that need to be put to Shapps himself -- as housing minister, he is now responsible for ameliorating the ever-worsening crisis in the UK's housing sector.

The loss of council homes for life, the chronic shortage of affordable housing in every part of the UK, and his recent remarks on housing association salaries are all areas where Shapps should be grilled.

But perhaps most important to pin down is the effect of the planned council tax freeze on new houses, or the New Homes Bonus scheme, as it has been called. Toby Thomas over at Left Foot Forward reports that shadow housing minister John Healey, in his speech to the Labour Party conference today, has once again strongly criticised this particular policy, arguing that it will in fact result in an increase in council tax, a disincentive for local authorities to build new houses, and an overall effect that some local authorities will end up paying the housing bills of others out of existing budgets (the New Homes Bonus will come out of existing grants). Toby writes:

Healey's analysis finds that 103 councils will suffer a fund-cut of on average £2 million each, helping to pay for the 222 councils who will gain by £400,000. Bigger towns are likely to lose out most, with Birmingham needing 8,500 homes a year built to avoid losing its grant, while Blaby in Leicestershire needs just 70.

This effect could in turn be heightened should local authorities choose not to embrace their newly-devolved role as the lead agency for house-building in their area. In an interview I did last week with Sir Bob Kerslake, incoming permanent secretary at Communities and Local Government and currently chief executive of the Homes and Communities Agency, he expressed the hope that "forward-looking" local authorities will seize on these incentives, but acknowledged that this will create inequality across the UK. He said:

"You can work with local authorities and show them potential, and even trade off one benefit of housing with another benefit, but in teh end I thnk if they set their face against it then they have to realise that different places will end up in different situations... That is the reality of looking backward."

Perhaps Grant Shapps will be able to shed some light this evening on what people stuck in poor quality housing who happen to live in a backward looking local authority should do to improve their situation, when faced with the reality of the arbitrary inequality created by such "big society" devolution.

Caroline Crampton is assistant editor of the New Statesman.

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I was wrong about Help to Buy - but I'm still glad it's gone

As a mortgage journalist in 2013, I was deeply sceptical of the guarantee scheme. 

If you just read the headlines about Help to Buy, you could be under the impression that Theresa May has just axed an important scheme for first-time buyers. If you're on the left, you might conclude that she is on a mission to make life worse for ordinary working people. If you just enjoy blue-on-blue action, it's a swipe at the Chancellor she sacked, George Osborne.

Except it's none of those things. Help to Buy mortgage guarantee scheme is a policy that actually worked pretty well - despite the concerns of financial journalists including me - and has served its purpose.

When Osborne first announced Help to Buy in 2013, it was controversial. Mortgage journalists, such as I was at the time, were still mopping up news from the financial crisis. We were still writing up reports about the toxic loan books that had brought the banks crashing down. The idea of the Government promising to bail out mortgage borrowers seemed the height of recklessness.

But the Government always intended Help to Buy mortgage guarantee to act as a stimulus, not a long-term solution. From the beginning, it had an end date - 31 December 2016. The idea was to encourage big banks to start lending again.

So far, the record of Help to Buy has been pretty good. A first-time buyer in 2013 with a 5 per cent deposit had 56 mortgage products to choose from - not much when you consider some of those products would have been ridiculously expensive or would come with many strings attached. By 2016, according to Moneyfacts, first-time buyers had 271 products to choose from, nearly a five-fold increase

Over the same period, financial regulators have introduced much tougher mortgage affordability rules. First-time buyers can be expected to be interrogated about their income, their little luxuries and how they would cope if interest rates rose (contrary to our expectations in 2013, the Bank of England base rate has actually fallen). 

A criticism that still rings true, however, is that the mortgage guarantee scheme only helps boost demand for properties, while doing nothing about the lack of housing supply. Unlike its sister scheme, the Help to Buy equity loan scheme, there is no incentive for property companies to build more homes. According to FullFact, there were just 112,000 homes being built in England and Wales in 2010. By 2015, that had increased, but only to a mere 149,000.

This lack of supply helps to prop up house prices - one of the factors making it so difficult to get on the housing ladder in the first place. In July, the average house price in England was £233,000. This means a first-time buyer with a 5 per cent deposit of £11,650 would still need to be earning nearly £50,000 to meet most mortgage affordability criteria. In other words, the Help to Buy mortgage guarantee is targeted squarely at the middle class.

The Government plans to maintain the Help to Buy equity loan scheme, which is restricted to new builds, and the Help to Buy ISA, which rewards savers at a time of low interest rates. As for Help to Buy mortgage guarantee, the scheme may be dead, but so long as high street banks are offering 95 per cent mortgages, its effects are still with us.