First-time buyers will be offered 100,000 new homes on the cheap as Labour tries to help those priced out of the housing market.
The party today announced it would create a ‘FirstBuy’ homes scheme if it wins the election, which would see the asking price of the new homes capped in line with average earnings across the country.
The 100,000 homes would only be available to first-time buyers, and local people would be given ‘first-dibs’ on the properties.
The Chartered Institute of Housing described the plan as “encouraging”, but the the Conservatives dismissed the announcement as yet another “unfunded” policy.
Labour will pay for the scheme through its £250billion ‘National Transformation Fund’ - to be funded by borrowing - and party leader Jeremy Corbyn said: “High prices, excessive rents and the chronic lack of affordable housing are ruining the lives of young people, families and aspiring homeowners.
“As part of our massive housebuilding commitment, Labour will ensure 100,000 FirstBuy Homes are available at discounted rates to local first time buyers.
“This will transform the housing market and put the needs of younger house buyers and local workers first.”
The FirstBuy scheme will see local authorities set the asking price of new-builds, so average mortgage payments do not exceed a third of average household incomes in the local area.
Labour estimates that in areas where there is a sizeable disparity between earnings and house prices first-time buyers could get the equivalent of 40% off the normal cost of the home.
Figures released by the Office for National Statistics in March showed the average home now costs 7.6 times the average annual earnings of workers in England and Wales - and this scheme could halve that ratio in some areas.
Melanie Rees, head of policy at the Chartered Institute of Housing, said: “Given the desperate need for more affordable housing for both sale and rent it is encouraging to see a set of proposals which recognises the need to build a significant number of new homes across a range of tenures.
“It is also pleasing to see that councils would play a significant part in building the new homes we need – this is something we’ve been calling for for some time.
“Proposals to link the cost of housing to local incomes and to introduce a set of minimum standards for the private rented sector are also particularly welcome.
“As ever the detail of the proposals will be key.”
Labour’s Shadow Housing Secretary John Healey said: “Our first Labour housing priority will be help for young first-time buyers. Under the last Labour government, a million more families became home-owners but now the Tories are failing first-time buyers on middle incomes.
“Under the Conservatives since 2010 homeownership has fallen by 200,000 with younger families on ordinary incomes the hardest hit.
“Labour’s new FirstBuy Homes will give aspiring first-time buyers on ordinary wages who’ve been failed for the last seven years hope that things can change.”
The Conservatives estimate the scheme would cost £4.2 billion, and Minster for the Northern Powerhouse Andrew Percy said: “This is just another unfunded promise Jeremy Corbyn can’t deliver.
“Last time Labour crashed the economy, housebuilding fell to its lowest peacetime level since the 1920s – and with Jeremy Corbyn in charge of the Brexit negotiations and John McDonnell in charge of the economy you’d see the same all over again.
“We have got Britain building again so more people can have good housing – delivering 190,000 extra homes in 2015-16.
“If we vote Conservative and keep Theresa May as Prime Minister we will keep our economy strong, deliver a new generation of social housing, and keep on building more homes.”
Labour has consistently polled ahead of the Tories when it comes to trust on solving the housing crisis.
HuffPost UK revealed in April the party would create a dedicated Housing Ministry if it won the election to oversee the construction of a million new homes in the next five years.
It will also introduced a two year stamp duty holiday for first-time buyers, and an extension and re-focusing of Help to Buy so that it is only for first-time buyers.