Tory Politician Suggests Homeless People Could ‘Save For Mortgage Deposits’ Using Benefits

A Conservative politician has suggested that homeless people could ‘save for mortgage deposits’ using their benefits.

Shaun Bailey, who is the Conservative mayoral candidate for City Hall, has argued that many homeless people living in temporary accommodation in London could save for a mortgage deposit for a shared ownership home.

Statistics from the Combined Homelessness and Information Network (CHAIN) indicate a 21% increase in rough sleeping in London in 2020, with an 82% increase in rough sleepers between the ages of 18 and 25 in the latest quarter from the year prior.

In November, Bailey announced his plans for young Londoners to be able to buy new ‘Millenial homes’ for just £100,000 in the city, with a mortgage deposit of just £5,000.

Bailey spoke of his ambition to build houses, which are meant for ‘renting, not buying’, telling City AM last year:

I spent parts of my twenties homeless, wondering whether I’d ever get on the housing ladder.

Shared Ownership was the first step on the housing ladder for me and my priority is to give more young people the same opportunity too.

However, although Bailey was praised by some for this focus, there were others who criticised his approach, which some believe simply covers up the ongoing problem of inaffordable housing in London.

Indeed, as pointed out at the time on housing, transport and infrastructure blog Murky Depths, £100,000 will only afford a buyer a small percentage of a one bed flat (as low as 10%), valuing a small flat as within the £400,000 to £1 million range.

Furthemore, shared ownership means that buyers will have to pay the mortgage as well as rent and service charges, which could well rise significantly above inflation rates every year.

As per the most recent figures, there are 62,670 households in temporary accommodation in the capital city, including 44,190 with children. According to Inside Housing, more than double the combined figures recorded throughout the rest of the country.

When asked by Inside Housing how his housing plans would help these families, Bailey said:

A large number of those 62,000 people you’ve identified would not be eligible for what he’s (Sadiq Khan) saying and would be eligible for what I’m saying.

In October, Khan urged ministers to publish guidance on making shelters ‘COVID-secure’, and to provide enough funding for alternative, self-contained accommodation.

In a letter addressed to housing secretary Robert Jenrick, the London mayor warned that rough sleepers could be forced to choose between sleeping on the streets or running the risk of catching coronavirus in a night shelter during the cold winter season ahead.

When asked how homeless families might be able to raise a £5,000 deposit and secure a mortgage for their shared ownership property, Bailey told Inside Housing:

I don’t think the £5,000 will (be a problem). The mortgage application thing might be a bit tougher… They could save for it, yeah.

Bailey proceeded to state that when he was homeless and sofa surfing in his twenties, he would have been unable to save up for a mortgage deposit. However, he expressed confidence that ‘a full proportion’ of homeless families living in London today would be able to do just this.

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