Labour unveils grand plan to help first-time buyers
Sir Keir Starmer has claimed he will make the mortgage guarantee scheme a permanent fixture to ensure low-deposit mortgages are available for first-time buyers.
Back in 2021 Rishi Sunak introduced the mortgage guarantee scheme as a bid to increase the supply of 5% deposit mortgages. Jeremy Hunt, the current Chancellor, has extended the scheme until July next year as the current cost-of-living crisis has made it increasingly difficult for first-time buyers to get on the property ladder.
The existing mortgage guarantee allows lenders to purchase a guarantee on part of mortgages, so if a bank decides to repossess a house, the government could compensate for some of its losses.
However, Sir Keir Starmer has announced that should be successful in the next General Election, he would implement the scheme permanently. The announcement has come just days after he went head-to-head with Rishi Sunak in the first televised debate, where he said the dream of owning a home for young people has gone.
In the debate, Starmer said: ‘After 14 years of Conservative government, the dream of homeownership 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.’
Although, experts have expressed concerns that Labour’s housing plans are too good to be true. Figures from the Office for National Statistics show some 40% of the 16.5 million people aged 15 to 34 in the UK were living with their parents in 2022, which equates to around 6.7 million people. What’s more, David Sturrock, a senior research economist at the Institute for Fiscal Studies, said big falls in homeownership during the 2000s meant young adults are now a third less likely to own their own home than they were 25 years ago.
Brokers have claimed that the process of buying a house is more than just raising the money for a deposit. Borrows still have to pass checks to show they can afford mortgage repayments and people are only lent loans if they have a sufficient regular income, irrespective of any government guarantee.
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