In his autumn budget speech, the Chancellor of the Exchequer Phillip Hammond, pledged to halve the number of people forced to sleep on the streets by 2020. This is considerably less philanthropic than it might seem, given that rough sleeping has doubled since this government came to power. But this is not a party political broadcast… in truth; successive governments have consistently failed to adequately address the issue of homelessness. Nonetheless, if his proposal comes to fruition, Mr Hammond’s aim would still mean we have over 4,500 people on the streets – the same figure of recorded rough sleepers in 2010, which isn’t great by any measure.

At the same time, Mr Hammond announced that he would abolish stamp duty for first time buyers.  What this effectively appears to mean is that someone who is a first time buyer in Coventry & Warwickshire will be given financial support to buy a property up to the value of £300,000… but what does that mean in practice?

Let’s look at a scenario on the maximum end of the spectrum. If you buy a £300,000 house with a minimum 5% deposit, you would borrow £285,000. The cheapest 25 year standard variable rate repayment mortgage available at the moment would mean monthly repayments of over £1,580 per month. (That monthly repayment is virtually identical to the total take home pay of someone earning £23,000 a year).

So, based on the assumption that a loan of four times salary could be secured, you would need to have a gross income of between £70,000 to £90,000 a year (depending upon individual circumstances).  That, of course, is in addition to a having a cash deposit of £15,000, and enough money left over to pay for all the other things like solicitors fees, furnishings, removals etc.

Depending on where you look, the average income in Coventry is roughly between £26,000-£30,000. So you’d need to be earning around three times the average salary to be able to afford the mortgage above.

So at the end of the day, what does the Chancellor’s initiative offer?  Basically, if you earn about £80,000 and have £15,000 plus in savings, you will be given a £5,000 gift to buy a house which is valued some 40% higher than the average Coventry property.  In other words, some well off people who, I would argue, don’t need help to get onto the housing ladder will receive a cash benefit whilst others have to sleep on the street.

Whilst national housing policy is a little more complicated than this example suggests, what it does clearly demonstrate is that the approach of this government is definitely not designed to assist those in greatest need despite what they might claim.

Based on a quote attributed (possibly wrongly) to several people including Mahatma Ghandi and Pope John Paul II, “a nation’s greatness is measured by how it treats its weakest members”. To still have people sleeping on the streets suggests something considerably less than greatness.

If you want to do the sums for yourself (or merely check mine), just go online and try any of the comparison websites like money supermarket or money saving expert yourself.