Only way to solve housing crisis is to ban foreign owners

IS THERE any Conservative party policy which has caught the public imagination quite so much as the right to buy? Over the course of the 1980s, nearly a million former council tenants used the scheme to become home-owners, taking control of their own financial destinies.

- Ross Clark

Estates where door after door had once been painted in the same shade of municipal red suddenly sprouted those of all designs and colours and people started to stamp their own imprint on their home. We are forever being bombarded with statistics on housing but it is hard to put a financial value on simple freedoms like that.

It is easy to cheer, then, efforts by the Government to try once again to extend homeownership to the masses. But I am sorry, I can only muster two cheers for the announcements made by housing minister Michael Gove this week to try to revive the right to buy.

The plans are certainly eyecatching. The Government proposes that social housing tenants should be allowed to count their income from benefits when applying for a mortgage. Given that it was sub-prime mortgages, advanced to households that couldn’t afford the repayments, which triggered the 2008/09 financial crisis, critics are right to be wary about making it too easy to take out large loans.

Mr Gove’s plan will only work if banks and building societies are prepared to lend the money – and I suspect they will be reluctant to do so unless the Government underwrites their debts – as it did with George Osborne’s Help to Buy scheme.