6 June 2024, 22:42
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Labour has said it will help 80,000 people buy homes over the next five years with a permanent mortgage guarantee scheme.
The party said its ‘freedom to buy’ scheme would replace an existing mortgage guarantee programme that is due to run out in a year’s time.
Labour said the existing scheme has never been properly integrated into the wider mortgage landscape by lenders, and is considered “peripheral”.
It comes as part of a broader housing offering to voters, which includes a pledge to build 1.5 million homes over the next five years, a promise to give local people a chance to buy new homes near them first, a tax on foreign buyers, and reforming compulsory purchase rules.
Labour leader Sir Keir warned: “A generation face becoming renters for life.”
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He added: “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 said its proposed mortgage guarantee scheme would have “the state acting as guarantor for prospective homeowners who struggle to save for a large deposit”.
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They added that it would be “a permanent product”, in contrast with the current programme, which comes to a close at the end of June next year.
The scheme as it currently exists allows mortgage lenders to buy a guarantee on part of mortgages. That means that if the lender repossesses a property, ministers would compensate some of its losses.
The Treasury says the current mortgage scheme is meant “to increase the appetite of mortgage lenders for high loan-to-value lending” – in essence meaning that buyers need to put up less cash to buy their home.
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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Labour has also pledged to “reintroduce housing targets”, fast-track planning permissions on brownfield land and prioritise “grey belt” building to meet its 1.5 million home target.
Conservative Chancellor Jeremy Hunt wrote an article on Wednesday accusing Sir Keir of “playing the public for fools”.
Mr Hunt said his new “Family Home Tax Guarantee” is a commitment “not to increase the number of council tax bands, undertake an expensive council tax revaluation, or cut council tax discounts”, and to not increase the rate or level of stamp duty which buyers pay when they purchase property.
He wrote: “I am throwing down the gauntlet to (shadow chancellor) Rachel Reeves and Sir Keir Starmer to join us in this pledge.
“This isn’t party political point-scoring. I actually want to see the Labour Party say they will put families first and higher taxes second.”
Mr Hunt added: “Families need to have the peace of mind that the Government will not spring surprise tax rises on them.”