06 June 2024 , 21:30
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First-time buyers would get help getting on the property ladder under Labour plans for a permanent mortgage guarantee scheme.
Keir Starmer unveiled plans for a Freedom to Buy Scheme to help people struggling to save for a large deposit, who can’t rely on cash gifts from their families. Under the plans, first-time buyers will be able to take out a mortgage with a 5% deposit and the state will act as a guarantor for prospective homeowners.
The Labour plan would build on the current mortgage guarantee scheme, a temporary measure introduced in 2021 to boost the market after Covid lockdowns. It allows lenders to purchase a guarantee on part of mortgages, so if a bank decides to repossess a house, the Government could compensate some of its losses. It was due to expire next year.
Labour will create a permanent scheme, which it says would help 80,000 young people get on the housing ladder over the next five years. It comes after census data last year revealed that the majority of young adults, aged 20-24, live at home with parents.
Keir Starmer will set out the plans tomorrow (Getty Images)Labour sources have said they will "work with lenders and industry on increasing uptake" of the permanent scheme, if they are able to form a government next month.
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Mr Starmer 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."
Labour has also vowed to overhaul planning rules to build 1.5 million homes, with new housing targets and directives to build on disused grey belt land, fast track permissions on brownfield and build the next generation of new towns.
Angela Rayner, 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."