A Labour government would bring closer the “dream of home ownership” for young people by abolishing stamp duty for all first-time buyers purchasing homes worth up to £300,000, Ed Miliband will announce.
In one of the boldest policy announcements of the election campaign, designed to steal David Cameron’s thunder as the champion of a property-owning democracy, the Labour leader will pledge that 90% of first-time buyers would save up to £5,000.
The Labour leader will say in a speech on Monday in the marginal seat of Stockton: “There’s nothing more British than the dream of home ownership, starting out in a place of your own. But for so many young people today that dream is fading with more people than ever renting when they want to buy, new properties being snapped up before local people get a look-in, young families wondering if this country will ever work for them. That is the condition of Britain today, a modern housing crisis which only a Labour government will tackle.”
Miliband will also announce:
- First Call, a policy that will give first-time buyers the first choice of up to half of the homes being built in their area. Labour is planning to build 1m homes in the next parliament.
- Local First, an initiative to prevent foreign buyers from buying properties before local buyers have had the opportunity. This would be done by ensuring properties are advertised locally and by increasing taxes paid by foreign investors and council tax for empty homes.
The announcement by Miliband, which comes after Labour said it would peg rent rises for 11 million people living in private accommodation to the rate of inflation, is seen by Labour as one of the party’s most significant announcements of the election. Miliband aims to show that Labour can deliver a voter-friendly policy that will work in practical terms, unlike the Tory pledge to extend the right to buy to housing association tenants. That announcement had a poor reception with housing associations and Jones Lang La Salle, the global property group, saying it amounted to an unaffordable short-term idea.
The Labour pledge to abolish stamp duty for first-time buyers buying homes worth up to £300,000 will benefit nine in 10 such buyers to the tune of £5,000. The £225m cost of the scheme, which will be in place for the first three years of a Labour government, will be fully funded by tackling tax avoidance by landlords, increasing tax paid by holding companies that buy UK property on behalf of investors and by cutting the tax relief for landlords who fail to maintain their properties.
Miliband will say: “It is simply too expensive for so many young people to buy a home today, saving up for the deposit, paying the fees and having enough left over for the stamp duty. So we’re going to act so we can transform the opportunities for young working people in our country. For the first three years of the next Labour government, we will abolish stamp duty for all first-time buyers of homes under £300,000.”
The announcement by Miliband follows an aggressive Tory response to his announcement on Sunday that landlords would be barred from increasing rents in any one year above the consumer prices index. This would be established through three-year tenancies to give tenants greater security. The Tories pointed out that Emma Reynolds, the shadow housing minister, has said that rent controls do not work out.
But Miliband will hit back on Monday as he accuses the Tories of presiding over the lowest levels of housebuilding in peacetime since the 1920s. Home ownership has declined to its lowest level in 30 years while the Tories are planning to invest the lowest amount in affordable housebuilding for 14 years, according to Labour.
The Labour leader will say: “The Tories have presided over the lowest level of housebuilding for almost 100 years and the lowest rate of home ownership for a generation. No wonder people can’t get the start they need, working families deserve better. Britain can’t continue like this.”
“Our plan is grounded in the idea that it is only when working people succeed that Britain succeeds. If we win the election in just a few days’ time, the next Labour government will make sure there are homes to buy and take action on rents. It is a better deal for housing, a better start for the next generation, a better plan, a better future for Britain.”
Ed Balls, the shadow chancellor, will say: “A Labour Treasury after the election will tackle the housing crisis and back young people aspiring to buy their own home. Our fully funded plan will slash stamp duty to zero for first-time buyers on properties up to £300,000. This will save money that can instead be put towards a deposit and all the other costs that mount up when you buy a home. And we’ll get more affordable homes built too, with the biggest housebuilding programme in a generation. ”
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