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Housing and the Credit Crunch

I am grateful to the hon. Gentleman for raising that, because it is a classic illustration of the then Government's response being fragmented and not entirely effective. After spending a long time wondering how to deal with the problem, they devised something known as the housing market package, which was additional funding for the Housing Corporation to enable housing associations to go out and buy properties on the open market. They did, but the problem was that they bought a lot of poor-quality property, and were subsequently faced with serious problems of managing properties that were not of a sufficient standard, or size in many cases, for social housing needs. That is exactly one of the lessons from the past that I and others have been pointing out to the Government for the past year and a half. It is helpful during a recession for Government agencies to use resources to acquire empty properties, which should not be left empty when there are housing needs, but the acquisitions must be carefully chosen to ensure that they are of a sufficient size and quality to provide decent homes for the people who will be renting them. When people buy a home, it may be a loose fit. They may buy a house that is larger than they need. They can choose to have extra space, and if they find that they are a bit cramped, they can move on if they have the resources to do so. When people are allocated a social housing tenancy, they are usually allocated a home with a tight fit that is sufficient for their needs at that time, but not with spare bedrooms. The opportunities to move are often limited. It is important to maintain the quality and attractiveness of the social housing stock and not to make ill-advised acquisitions. That is one reason why I am partly, although not wholly, critical of the then Government's response to the recession in the early 1990s. Not all the present Government's measures have been wholly successful either, but they have been wide-ranging, and have included measures affecting the mortgage market, people's ability to acquire shared equity products and other means of bridging the gap between the cost of a property and their ability to raise mortgage finance, helping to avoid unnecessary repossessions, assisting in the acquisition and construction of additional homes, and intervention to facilitate the continuation of regeneration schemes that otherwise might not have been viable and would have stalled. I have not mentioned the whole range of measures, but they have been an heroic response to a very serious challenge. I compliment the Government on recognising the scale of the problem and the degree to which they have responded. The cumulative impact of the range of measures has been important in limiting the scale of the damage, which could have been greater than it has been. During an intervention on my hon. Friend the Member for Milton Keynes, I referred to the Council of Mortgage Lenders' latest forecast of repossessions. Some 60,000 homes are expected to be repossessed this year, and that is not comfortable, but it is still better than the 75,000 that was forecast a few months ago. That is an example of limiting the damage.