Labour launches ‘Freedom to Buy’ scheme to get over 80,000 young people out of their parents’ house and onto the housing ladder
|
Labour has today [FRIDAY] launched a new Freedom to Buy scheme to
get more young people onto the housing ladder. Labour's plans would
support over 80,000 young people to get on the housing ladder, over
the next five years. Keir Starmer has previously spoken about the
‘security' his childhood family home gave his parents. The Labour
leader has condemned the Conservative record on housebuilding,
accusing the government of ‘strangling the aspiration of homeowning
for a...Request free trial
Labour has today [FRIDAY] launched a new Freedom to Buy scheme to get more young people onto the housing ladder. Labour's plans would support over 80,000 young people to get on the housing ladder, over the next five years. Keir Starmer has previously spoken about the ‘security' his childhood family home gave his parents. The Labour leader has condemned the Conservative record on housebuilding, accusing the government of ‘strangling the aspiration of homeowning for a whole generation.' Labour's new, permanent, Freedom to Buy Scheme for first-time buyers will help families who struggle to save for a large deposit and can't rely on cash gifts from relatives, with a permanent mortgage guarantee scheme to help working people get a mortgage and buy a home. Half of young first-time buyers now receive financial support from family to buy their home, with an average gift of £25k. Children of homeowners are now twice as likely to own their own homes in comparison to children of renters. Saving for a deposit is one of the biggest hurdles for working people getting on the ladder, with many paying more in rent than they would for a mortgage. Tory planning changes also mean the average deposit is set to soar by nearly £9k by 2030. Keir Starmer has pledged to reform planning to get young people out of their parents' house and onto the housing ladder. This comes as analysis shows the most common living situation for young people is back at home and census data has revealed for the first time that the majority of young adults, aged 20-24, now live at home with parents. The Labour Party will argue that the best way to give young people the freedom to move out of their childhood bedroom is by building more homes, outlining a comprehensive plan to build 1.5 million homes over the next Parliament. The Tories are currently planning to axe the scheme in June 2025. This would leave 65,000 young people denied the opportunity to own their own home, in comparison to if Labour were to continue the scheme permanently. The average value of a home purchased using the scheme is £202,000, around the value of the flat Rishi Sunak bought with a six-figure loan from his parents. The Labour Party has pledged to get working people on the housing ladder with:
Under the Tories, planning permissions for new homes have plummeted to record lows, whilst housebuilding is set to crater. Councils are already using Tory planning changes to overturn applications for new homes they had originally approved. Labour have also pledged to keep mortgage rates as low as possible with their tough fiscal rules and fiscal lock. Keir Starmer, Leader of the Labour Party, said: “After 14 years of Conservative government, the dream of home ownership is out of reach for too many hard working people. Despite doing everything right, they can't move on and up. A generation face becoming renters for life. “My parents' home gave them security and was a foundation for our family. As Prime Minister, I will turn the dream of owning a home into a reality. “Our changed Labour Party will be on the side of the builders not the blockers, to get Britain building again. My Labour Government will help first-time buyers onto the ladder with a new Freedom to Buy scheme for those without a large deposit, and by giving them first dibs on new developments. “Labour backs hard work and ambition, and will clear the way for the opportunity to own a home. It's time to stop the chaos, turn the page, and rebuild Britain.” Angela Rayner, Labour Deputy Leader and Shadow Secretary of State for Levelling Up, Housing and Communities, said: “The Tories have crashed housebuilding, putting the dream of a safe, secure and affordable home further out of reach. Rishi Sunak is too weak to deliver the change our country needs. “Labour's new Freedom to Buy scheme will deliver for working people across the country. We will deliver more action on housing in the first year of a Labour Government than this crumbling Conservative government has managed in over a decade. “Labour's plan would get Britain building again with a new scheme to help young people get a mortgage and with a housing recovery plan, creating a generation of new towns and unlocking economic growth across Britain. "Labour is the party of homeownership, and the only Party serious about building the homes Britain needs. We will deliver the change needed and end the Tory chaos.” Ends Notes Freedom to Buy Scheme Labour will introduce a permanent mortgage guarantee scheme, with the state acting as guarantor for prospective homeowners who struggle to save for a large deposit. Our scheme will be more comprehensive than the existing government scheme that is set to expire in June 2025, offering a permanent product for first-time buyers and families looking to get on the ladder. In Britain there are large number of families earning a decent living who are stuck in expensive rented accommodation that often costs more per month than a mortgage. This group – dubbed ‘resentful renters' by the Centre for Policy Studies, can easily afford mortgage repayments but struggle to save for a large deposit to get on the ladder. A permanent mortgage guarantee scheme will give these families a leg up onto the ladder by providing a guarantee for part of their mortgage, meaning they don't need as big a deposit to secure a mortgage and buy a new home. A Labour government would establish the existing Mortgage Guarantee Scheme as a permanent scheme that will run past June 2025. As part of making this scheme permanent a Labour government will rebrand and remarket the scheme so it becomes an easily recognisable and established product that lenders and buyers can confidently navigate. A permanent scheme will establish insured mortgages as an integral part of the market that lenders and borrowers can confidently navigate. The government's existing scheme has only ever established itself as a peripheral part of the market because it has only ever been designed a temporary scheme that has been hastily extended at the last minute as it was about to expire. For lenders, there's little incentive to properly integrate the scheme into their offer to customers, as they expect it to expire in a matter of months. Even though it's repeatedly been extended, the lack of certainty means many lenders treat it as a peripheral product. On the other hand, prospective buyers struggle to find authoritative and accessible information about the scheme, and those who are saving to buy months and years in advance have no guarantee it will continue to exist when they come to buy a home. A permanent mortgage guarantee scheme that is an established part of the market will increase the availability and lower the cost of mortgages for buyers who don't have access to a large deposit. In other countries like Australia and Canada, widespread use of mortgage insurance lowers the cost and increases availability of mortgage products for families with smaller deposits, supporting homeownership. A Labour government will work with lenders and industry on increasing uptake of the scheme and ensure front line mortgage advisors are aware of the product and can confidently offer it prospective buyers who want to get on the ladder. The Conservatives housing crisis is failing families
|