Reeves declares that Labour is now the “only choice for people who dream of owning their own home”

Rachel Reeves, Labour’s Shadow Chancellor today said homeownership will be at the heart of her plan for Securonomics, as she and Lisa Nandy convene an emergency summit of mortgage brokers to hear first-hand the impact the Tory mortgage bombshell is having on first-time buyers and homeowners.  

Reeves will say that Labour’s plans to put rocket boosters under housebuilding will bring security to families and the national economy.

Staking a claim on Tory turf as the Government faces three crucial by-elections, she added that “the Labour Party is now the only choice for people who dream of owning their own home”.

Reeves’ remarks come as new analysis shows Tory failure on housebuilding is set to lead to a £44 billion hit to the UK economy, and that the state is set to miss out on £16 billion in tax receipts because of the projected fall in housebuilding.

Labour’s plan to ensure 70% of people own their own homes includes:  

• Reforming planning and bringing back targets: Reversing the changes announced via specific amendments to the National Planning Policy Framework in December 2022 and reintroducing local housing targets.
• Expanding home ownership: Helping renters get onto the ladder and expanding new forms of ownership. Labour will do this by working with lenders to ensure meeting rent payments will be included in mortgage affordability tests, and supporting models of sub-market home ownership, including shared, discounted ownership as well as community-led and cooperative models of ownership. 
• Introducing a state-backed mortgage insurance scheme: To help more people get on the housing ladder, with the state acting as guarantor for prospective homeowners who struggle to save for a large deposit.   
• Giving local people first dibs: Labour will ensure that first-time buyers can access homes that are built, by giving them first dibs on new developments in their area.   

Reeves says if the government had adopted such a plan, families across the country would have been better insulated from both the Tory mortgage bombshell and the extraordinary spike in house prices. 

The Shadow Chancellor will also underline the importance of ambition on housebuilding to economic growth, saying to realise the enormous potential of our country, businesses need qualified people to have homes nearby, making these plans vital for growth and jobs too.

Recent analysis that shows around 700,000 more adults were living with their parents in 2021 than in 2011, according to the recent Census, a rise of almost 15%. More than half of 20 to 24 year olds now live with their parents, while it was 44% in 2011.

Rachel Reeves MP, Labour’s Shadow Chancellor, said: 

“Too often, families who are saving for their first home but getting no closer to buying it tell me that they feel like they’re doing something wrong. 

“But there is a common denominator here when it comes to our broken housing market, insecure economy, soaring prices and broken public services – and that is a Tory government that has failed to achieve anything in the last 13 years. 

“Nowhere is that more true than on homeownership, with more and more people locked out of the market, or forced to pay hundreds of pounds a month more because of the Tory mortgage bombshell. It is clear that the Labour Party is now the only choice for people who dream of owning their own home. 

“By embracing a new era of Securonomics – where we put financial and economic security first, Labour will get our economy on an even keel and get it growing, so we can move forward into the opportunities of the future that Britain deserves.”

Ends 

Notes to editors: 

• The summit of mortgage brokers will take place on Wednesday, 12 July in London and will cover the impact facing homeowners as well as first time buyers. 
• Under the Tories, the number of new houses being started has fallen by 20,000 a year compared to Labour’s record in government.  

Figures broken down:

• Lichfields assess that Government planning policy changes will reduce net additional homes produced by around 77k per annum
• That will reduce the size of the residential housing sector by a third, based on Lichfields analysis that net additional homes will be just 156k per year after the change
• https://lichfields.uk/blog/2023/february/27/making-a-bad-situation-worse-the-impact-of-the-proposed-nppf-changes-on-housing-supply/#_edn

• In 2017, when net additional homes was 224,000, around £38bn in output was produced
• https://www.hbf.co.uk/documents/7876/The_Economic_Footprint_of_UK_House_Building_July_2018LR.pdf (table 4.1)
• Compared to 2017 GDP, that is 1.8% of GDP
• https://www.ons.gov.uk/economy/grossdomesticproductgdp/timeseries/ybha/pn2
• A fall of a third in construction output would therefore reduce GDP by 0.6%, or using the OBR’s forecast of GDP for 2023/24, £15.5bn
• https://obr.uk/efo/economic-and-fiscal-outlook-march-2023/ (table A.3)
• Furthermore, estimates suggest that for every £1 spent on construction, there is an overall economic return of £2.84
• https://assets.ctfassets.net/6sxvmndnpn0s/5BKgjdK5ePYw4nAJFC23v/081fce21e4a75abb10a0cf784368ff4f/Shelter_UK_-_A_vision_for_social_housing_-_Full_interactive_report.pdf (page 184)
• So a reduction in construction spend of £15.5bn would lead to an overall hit to the economy of £44bn
• Given tax receipts are 36.9% of GDP, a £44bn reduction in GDP would mean suggest tax receipts are lower by £16bn
• https://obr.uk/efo/economic-and-fiscal-outlook-march-2023/ (table A.9)