Duncan Smith calls for major overhaul of housing policy

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Jobless social housing tenants who try to find work could be given an equity stake in their homes, former Tory leader Iain Duncan Smith will propose today.

He will call for a major overhaul of housing policy to put an end to the "cycle of destructive behaviour" of poverty, family breakdown and crime on council estates which have deteriorated into "ghettos".

His think tank, the influential Centre for Social Justice (CSJ), will set out the stark assessment of the decline of working class areas over the past half-century in a report on housing.

And it will propose new incentives to discourage social tenants getting into a downward spiral of benefits dependency.

The CSJ will call on a future Conservative government to consider rewarding people who demonstrate a desire to get back on the path to self-sufficiency to be rewarded with stakes in their own homes.

That could include people who pay their own rent, rather than relying on the state, and make contributions to the local community.

The CSJ even suggests that "genuinely" attempting to find a job could be enough for a tenant to qualify for a stake in their home, calling for an economic analysis of the possibility.

Nearly 10 million people live in council and housing association accommodation.

The report says that private ownership encourages more constructive and responsible behaviour than dependency on benefits and social housing.

"As a progressive society, we need to find a way to end the cycle of destructive behaviour on our social housing estates," it said.

"This must involve fostering a real link between aspiration and behavioural shift. Finding a way to relieve asset poverty, to offer social housing tenants a clear, achievable means to procure their own assets is tantamount to offering hope.

"Along with this hope comes the incentive to behave more constructively, to take action and responsibility for one's own life. Society will benefit in every way from these behavioural shifts."

The report says that tenants who pay rent and contribute to the community could be given a discount on the price if they decide to buy a property, whether outright or as part of a shared equity scheme.

It goes on that "constructive behaviour in the community", including a "genuine effort" to find work, could be rewarded with "increasingly larger equity stakes".

In a foreword to the report, Mr Duncan Smith said: "Housing policy must be seen as part of broader social policy which aims to get people back to work and in a position to help themselves, their families and communities.

"Currently, social housing can act as a huge disincentive to going back to work, and is blocking mobility.

"Over the years, our housing system has ghettoised poverty, creating broken estates where worklessness, dependency, family breakdown and addiction are endemic."

A spokesman for Communities and Local Government said: "The Government has announced plans to publish a housing reform green paper to create a fairer and more effective system for those living in rented housing, which will support aspiration and social mobility.

"Ministers are currently considering all the evidence and arguments in favour of reform."