Setting out its housing policy ahead of the General Election, Labour has vowed to help more than 80,000 first-time buyers onto the housing ladder with the introduction of a ‘Freedom to Buy’ scheme.
The scheme would be a permanent mortgage guarantee scheme to help working people who struggle to save for a large deposit.
It would be a continuation of the existing Mortgage Guarantee Scheme, which was created by the current Conservative Government and was set to be axed in 2025.
The party pledged to work closely with lenders and the property industry to increase uptake of the scheme to ensure it can be easily offered to prospective buyers.
Labour also promised to reform planning rules to build 1.5 million more homes, as part of its “mission to get Britain building again.”
Jeremy Leaf, north London estate agent and former RICS residential chairman, said: “This announcement is potentially good news, not just in terms of helping first-time buyers, which is always welcome to hear, but for us just as important is the ambition to increase housing supply and ease the planning system.
“Sadly we have heard similar announcements from both main political parties in the past where the end result doesn’t match the rhetoric.
“In our view, there is little point in coming to the aid of first-time buyers unless there is sufficient choice of properties for them.
“Otherwise, the outcome will simply be further house price inflation, which will make it even more difficult for young people coming along in future years.
“Certainly we would like to see more detail but we are also pleased that housing has finally seemed to be making an appearance in the election debate and not before time.
“There are many difficult decisions which need to be taken to improve the balance between supply and demand and particularly of affordable housing, including more balance in the system.”
Ben Twomey, chief executive of Generation Rent, added: “Renters deserve security too. While attention to the housing struggles of young adults is welcome, our work or personal circumstances mean not all of us are able to live at home with parents until we save enough to buy our first home.
“12 million people are privately renting right now and more than half of us have no savings at all.”
“Trying to put aside a house deposit while renting is like pushing a boulder up a hill that keeps getting steeper and steeper.
“The next Government must slam the brakes on soaring rents by limiting the current free-for-all that’s forcing a third of renters’ incomes straight into the pockets of landlords.
“This proposed scheme would make permanent the existing ability for people to buy their first home with just a 5% deposit.
“But 5% still means £12,497 on the average first time buyer mortgage, and as much as £21,669 if looking to buy in London.
“If rent rises continue to outpace wage growth, more tenants could face homelessness than benefit from this scheme.”
