You’ve probably heard the Labour government intends to build more new homes - you might even have chosen to vote for them based on this policy.
We've taken a closer look at the Labour party's pre-election manifesto where several policies were detailed that could help first-time buyers onto the property ladder, if the party goes ahead with them.
How did the Labour party pre-election manifesto pledge to help first-time buyers?
1. Labour aimed to build 1.5 million new homes in its first five years in government
One of the major promises the Labour government made is its plan build 1.5 million new homes during its five-year term.
It also intends to reform the planning system by cutting down on red tape, hiring more planning officers and giving more power to local planning and development authorities. This could quicken up planning processes, which in turn can lead to more homes being built faster.
2. Labour planned to give first-time buyers first dibs on new homes
While the 1.5 million homes Labour is looking to build won’t be exclusive for first-time buyers, the government says it’ll work with local councils to make sure first-time buyers get the chance to buy one before anyone else.
Labour also planned to raise the stamp duty surcharge for non-residents looking to buy property in the UK, which could help give first-time buyers an advantage.
3. Labour wants at least 750,000 new homes to be “affordable”
Labour wants at least 50% of the proposed 1.5 million new homes to be deemed “affordable housing”.
The term "affordable housing" refers to homes for either sale or rent at least 20% below market value, as part of different government programmes to help more people own their own home. These programmes include the Shared Ownership Scheme, Rent to Buy and First Homes Scheme.
The party also mentions that it wants to make changes to the Affordable Homes Programme, which grants funding to help build affordable housing, so that more homes can be built with the the funding that’s already been provided.
4. Labour wants to make it easier for you to buy a house with a smaller deposit
Labour planned to introduce a “permanent mortgage guarantee scheme”. According to the manifesto, this scheme would help first-time buyers who are struggling to save up for a large deposit and give them access to lower mortgage costs..
Currently, first-time buyers looking to build up a deposit can take advantage of a lifetime ISA, which gives them a government bonus of up to £1,000 a year towards buying their first place.
5. Labour planned to end the leasehold system
Labour's manifesto stated that it wants to remove the leasehold system and make commonholds a standard practice for properties that are on shared land, such as flats. This is because leaseholds are very expensive to renew.
With a commonhold, everyone owns the freehold of their own property in that building, but they also share ownership of the building and the land it sits on. So there is no ground rent to pay and property owners get to decide together how the building is run and maintained.
How could the government help me buy my first home?
By boosting your first-home deposit fund by up to £1,000 a year!
Lifetime ISAs are designed to help you buy your first home or save extra for retirement. Every time you pay in, the government tops up your payment by 25%.
You can invest up to £4,000 each tax year - if you reach this maximum, you'll get £1,000 from the government added to your lifetime ISA!
And, if you’re planning on buying with a partner who is also a first-time buyer, you can both use a separate lifetime ISA towards the same property, so you have double the bonus available.
Just be aware that if you withdraw the money in your lifetime ISA for anything other than buying your first home or after you turn 60, you’ll have to pay a 25% withdrawal charge on everything you take out.
OneFamily's Lifetime ISA invests in stocks and shares. This gives your money good potential to grow, but the value is likely to go both up and down over time and there is a risk you could get back less than you put in.
What other measures did Labour pledge?
There are a few other measures in the Labour pre-election manifesto that could make it easier for you to get on the property ladder.
- It wants to build green energy infrastructure that’s publicly owned, which could drive down the cost of electricity bills and leave you with more money at the end of the month to put towards your deposit.
- It wants to ban zero hour contracts and introduce better workers’ rights, such as protection from unfair dismissal. Depending on your career, this could mean better financial stability, so you might finally be able to commit to saving regularly.
- It wants to make sure the minimum wage is a “living wage”, meaning it takes into account what’s happening with inflation and the cost of living. This could cause minimum wage to go up, which could give you a pay rise.
- It also wants to ban the age bands on minimum wage. Currently, the minimum wage is lower for people under 21, so if you’re part of that age group you might see a bump in your salary – although details still need to be confirmed.
- The Renter’s Reform Bill aims to give renters more rights, including removing no-fault evictions and allowing renters to challenge their landlords about rent increases. If you’re currently renting, this could make you feel a little safer financially so you feel more able to put money away for a mortgage deposit.
