Generation Rent activists have expressed strong disapproval of Labour’s housing policy recently announced during the General Election campaign. The group issued a statement sharply criticizing Labour’s decision to launch a permanent extension of the existing Conservative government mortgage guarantee scheme. This move marks Labour’s first major housing policy in the current election campaign.
Labour’s proposal entails extending the mortgage guarantee scheme, which under the Conservative government is set to expire by June 2025. However, Labour aims to make its version of the scheme more comprehensive. It seeks to provide a permanent solution for first-time buyers and families aspiring to step onto the property ladder. By offering a long-term alternative to the Tory scheme, Labour hopes to address the housing needs of a wider demographic.
The decision to launch a permanent extension to the mortgage guarantee scheme underscores Labour’s commitment to addressing housing affordability issues. By providing ongoing support for first-time buyers and families, Labour aims to make homeownership more accessible and sustainable in the long run. However, the move has sparked criticism from Generation Rent activists, who argue that more comprehensive measures are needed to tackle the root causes of the housing crisis.
The initiative aims to make insured mortgages a standard feature of the market, providing assurance to both lenders and borrowers. According to a statement from the party, a Labour government will collaborate with lenders and industry stakeholders to boost the adoption of the scheme. Additionally, efforts will be made to ensure that frontline mortgage advisors are well-informed about the product, enabling them to confidently offer it to prospective buyers seeking to enter the property market.
Labour is also today reiterating its existing broad-brush housing policies –
- Implementing planning reforms to facilitate the construction of 1.5 million homes: The long-term solution to assist young individuals is through increasing housing supply. This involves reintroducing housing targets, repurposing disused green belt land, expediting permissions for brownfield sites, and developing the next wave of new towns.
- Prioritizing local residents: Collaborating with developers to ensure that local residents are given priority access to new developments, thereby ending the trend of entire developments being sold to international investors before local communities have the opportunity to participate.
- Taxing foreign buyers to finance planning officers: Imposing taxes on foreign buyers who drive up property prices, with the generated revenue allocated towards funding new planning officers tasked with approving homes required for the next generation.
- Overhauling compulsory purchase regulations to expedite housing construction: Restructuring compulsory purchase rules to prevent speculators from obstructing housebuilding progress and extracting value from infrastructure and affordable housing projects. Utilizing reformed compulsory purchase orders, if necessary, to support housing development and infrastructure delivery.
However, the statement released today fails to address rental reform, sparking a strong reaction from the advocacy group Generation Rent.
Ben Twomey, Chief Executive of Generation Rent, asserts: “Renters also deserve security. While efforts to address the housing challenges faced by young adults are appreciated, not everyone can reside with parents until they amass enough savings to purchase their first home. With 12 million individuals currently renting privately, and over half lacking any savings, attempting to save for a house deposit while renting feels like an uphill battle against escalating costs.
“The forthcoming government must take decisive action to curb skyrocketing rents by reining in the current unregulated rental market, which sees a third of renters’ incomes flow directly into landlords’ pockets.”
“The proposed scheme aims to establish a permanent avenue for individuals to purchase their first home with a minimal 5% deposit. However, with this deposit amounting to £12,497 on average for first-time buyers and reaching £21,669 in London, affordability remains a concern, especially amidst rent increases outpacing wage growth, potentially exacerbating homelessness.”
Launching the Labour Party’s ‘Freedom To Buy’ policy, Sir Keir Starmer states, “As Prime Minister, I aim to transform the aspiration of homeownership into reality. Our revitalized Labour Party will champion builders over hindrances, revitalizing Britain’s construction sector. Through our Freedom to Buy scheme and prioritizing first-time buyers in new developments, we’ll pave the way for homeownership.”
Angela Rayner, Labour’s Deputy Leader and Shadow Housing Secretary, emphasizes, “Labour’s new Freedom to Buy scheme prioritizes working people nationwide. In the first year of a Labour Government, we commit to more significant housing action than the Conservative government’s decade-long tenure. Our plan focuses on revitalizing the housing sector, facilitating mortgage access for young individuals, and implementing a comprehensive housing recovery strategy, including the development of new towns to stimulate economic growth across Britain.”
Rayner asserts, “Labour stands as the champion of homeownership and the sole party dedicated to addressing Britain’s housing needs. We are committed to delivering tangible change and putting an end to the chaos brought about by the Tories.”
