Labour to cap 100,000 new house prices in radical 'New Deal' offer

Posted On: 
5th June 2017

Labour today unveiled a radical plan to cap new house prices at local average incomes as part of a ‘New Deal’ for first time buyers.

Labour has promsed a 'New Deal' for the housing sector
Credit: 
PA Images

Mortgages on 100,000 so-called ‘FirstBuy’ homes would be set at a third of the average salary in each local authority, the party explained.

The pledge is part of a six-pronged raft of policies aimed at helping first time buyers, private renters, the homeless and those battling the council housing system waiting for properties.

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Labour leader Jeremy Corbyn promised to “start on fixing the housing crisis immediately” if he is elected into government on Thursday.

Prices for FirstBuy homes would be discounted by up to 40% of the market price and earmarked for people living locally, with a priority on teachers, nurses and tradesmen, the party said.

The properties will be built primarily by councils and housing associations and paid for partly through payments to councils by developers who want to build new homes.

And the discount would be preserved when the house is re-sold – meaning owners will be unable to make a full market-rate profit on the sale of their home.

'NEW DEAL'

Mr Corbyn said the scheme would “transform the housing market and put the needs of younger house buyers and local workers first”.

He added: “A Labour government will start on fixing the housing crisis immediately. “High prices, excessive rents and the chronic lack of affordable housing are ruining the lives of young people, families and aspiring homeowners."

Shadow Housing Minister John Healey said: “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.

“After seven years of failure, a Labour government will shift the housing market decisively towards first-time buyers on ordinary incomes.”

He added: "Labour offers a New Deal on housing between the people of this country and a new government."

House building has fallen to its lowest average level during peacetime since the 1920s and rough sleeping has almost doubled, Labour said.

Tory minister 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.”