Labor Party will offer “freedom to purchase” to young people with a mortgage guarantee system | Politics News

The party will also commit to building 1.5 million homes and reviewing the planning system to implement more housing action. But the Conservatives say Labour’s “tax raid” will “punish first-time buyers”.

By Jennifer Scott, political reporter @NifS

Thursday 6 June 2024 22:37, United Kingdom

The Labor Party will promise to get more young people into housing when it announces its “freedom to buy” plan on Friday.

The party will undertake to make the existing ones a reality mortgage guarantee scheme – which sees the government act as a guarantor for people who cannot save large deposits – into a permanent fixture if it wins the July 4 election.

Sir Keir Starmer will also commit to a review of the planning system, including the reintroduction of housing targets, saying his measures will allow 1.5 million more homes to be built in the next five years.

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“After 14 years of Conservative government, the dream of owning your own home is out of reach for many working people,” he will say.

“Despite doing everything right, they can’t move on and move up. A generation faces becoming lifelong tenants.

“My parents’ house gave them security and was the foundation of our family. As prime minister, I will make the dream of having a house of my own come true.”

But promote your party much maligned claim As Labor will raise people’s taxes by more than £2,000 in the next parliament to pay for its policies, Conservative Treasury chief secretary Laura Trott said: “The truth is that Labour’s tax raid will punish those who buy for the first time.

“What’s worse, your refusal to back our Homestead Tax Guarantee is the strongest signal yet that your home is next in Labour’s tax grab.”

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The mortgage guarantee scheme was first introduced by the Conservatives in 2021, after mortgage offers with a 5% deposit virtually disappeared after the pandemic.

By offering to be a guarantor for buyers and covering some of the costs if a home is repossessed, the scheme encourages lenders to offer deals for smaller deposits and helps those who can afford the monthly mortgage payments but struggle to save big. sums while renting in their homes. first house

However, the plan is only temporary and will end in 2025.

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Labour’s promise is to make the scheme a permanent offer, saying it would help more than 80,000 young people “leave their parents’ house” and buy their own home in the next parliament.

Among the planning changes, the party will promise to tax foreign buyers by “excluding young people” from the property market in order to pay new planning officers, which it claims will help increase approved projects.

It will recover the housing construction objectives: scrapped by conservatives in 2022 – as well as quick permits to build on abandoned land and reform compulsory purchase orders to “prevent speculators from thwarting housing construction.”

They will also promise to offer “first rights” on new developments to local people looking for a home and reiterate their promise to create “the next generation” of new towns.

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Labour’s deputy leader Angela Rayner, who has led the party’s housing policy, said: “The Conservatives have ruined housebuilding, putting the dream of a safe and affordable home even further out of reach. Rishi Sunak It is too weak to achieve the change we want in the country.

“Labour’s new Freedom to Buy plan will be a win-win for working people across the country. We will deliver more action on housing in the first year of a Labor government than this crumbling Conservative government has achieved in more than a decade.” .

Labor’s Sir Keir Starmer and Angela Rayner will make their housing announcement on Friday. Photo: PA

The policy announcements were welcomed by a number of industry experts, including Berkeley Homes and Barratt Developments.

And the Institute for Fiscal Studies (IFS) said the party’s plan had “the potential to reduce one of the barriers to home ownership” by helping those with smaller deposits.

But one of its senior research economists, David Sturrock, said getting a deposit was “just one hurdle”, adding: “Prospective buyers also need to have a high enough income to take out a (larger) mortgage and afford the repayments.” .

“As a result, potential buyers who are in their 30s and from more affluent backgrounds and looking to buy outside London and the South East are more likely to take advantage of this scheme.”

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Meanwhile, the Conservatives are announcing a new plan to raise the threshold at which parents start paying tax on high-income child benefits.

Instead of having to be paid when either parent earns more than £60,000 a year, it will now only be paid when the household income exceeds £120,000.

The Liberal Democrats will also focus on fathers, promising to “transform” parental leave by doubling statutory maternity pay and offering a “dad month” of paid leave for new fathers.

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