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Labour plans to introduce a permanent version of its Help to Buy mortgage guarantee scheme, called Freedom to Buy.
The mortgage guarantee scheme is currently due to expire in June 2025 and only covers homes worth up to £600,000.
The scheme allows prospective homebuyers to get a mortgage with just a 5 per cent down payment, with the state acting as a guarantor for the home and ensuring lenders receive the monthly mortgage payments.
Labour said Freedom to Buy would help more than 80,000 home buyers get onto the home buying ladder over the next five years.
“Fourteen years of Conservative government have put the dream of home ownership out of reach for many hard-working people – despite doing everything right – and they can’t get ahead, they can’t improve. A generation will be stuck renting for their whole lives,” Labour leader Keir Starmer said in the first televised general election debate with Chancellor Rishi Sunak.
“Their parents’ home gave them a sense of security and was the foundation of our family. As Prime Minister, I will make their dream of homeownership a reality.”
“Our changed Labour party will stand with builders, not those blocking it, to get Britain building again. My Labour government will help first-time buyers get on the home-buying ladder with a new freedom to buy scheme for those without a big down payment, and by giving them priority on new developments.
“Labour stands for hard work and ambition, and will pave the way for homeownership opportunity. It’s time to stop the chaos, turn a new page and rebuild Britain.”
300,000 housing goal achieved
The party also opted to reintroduce a commitment to build 300,000 homes a year, a promise the Conservatives made in 2019 but failed to meet every year and was eventually abandoned altogether.
Labour has promised to achieve this by reforming planning rules, making use of disused “grey belt” (low-quality green space), speeding up planning permission for brownfield land and building a new generation of new towns.
Simon Gerrard, managing director of property company Martin Gerrard, said: “I have long been concerned about children having no place to live, so it’s very welcome to see Labour introducing a policy initiative to build new homes.”
“The planning reforms and targets set out in the policy are ambitious but with a current lack of housing stock available for everyone, particularly first-time homebuyers, ambition is what we need.”
“Similar policies have been announced by governments over the past 14 years but consistently no action has been taken, so it’s very encouraging to see Labour prioritising this issue.”
Foreign buyers are shunned by locals
Labour promised to work with developers to give local people priority in new developments and said it would end the farce of entire developments being sold off to international investors before locals have a chance to move in.
The party has pledged to tax foreign buyers, signalling a preference for domestic buyers over those from overseas – non-British residents already pay 2% stamp duty on new purchases.
Gerrard added: “Labour’s proposed policy of prioritising domestic first-time buyers over overseas investors would also be a welcome change. Even in the rare cases where homebuying has been permitted under the current government, too often it does not actually offer aspiring British buyers the opportunity to get onto the home-buying ladder.”
“Underfunding local authorities has not helped by the slowing rate of housebuilding, and aligning a First for British Buyers policy with extra funding for local authorities would complement efforts to meet the ambitious housing targets set by Labour.”
The next general election will be held on July 4th and the Labour Party is highly likely to win.