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Labour pledges Freedom to Buy 'will make dreams a reality'

Labour pledges Freedom to Buy 'will make dreams a reality'
Anna Sagar
Written By:
Anna Sagar
Posted:
07/06/2024
Updated:
07/06/2024

Labour has announced it will make the mortgage guarantee scheme permanent to help get more people on the property ladder as part of its Freedom to Buy scheme.

In several posts on X, formerly known as Twitter, Sir Keir Starmer wrote: “After 14 years of the Tories, the dream of homeownership is out of reach for too many young people. With our Freedom to Buy scheme, my Labour Government would make it a reality again.”

He added: “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.”

Labour claims that the pledge to make the mortgage guarantee scheme permanent would help a further 80,000 young people get on the housing ladder.

Mortgage guarantee scheme

The mortgage guarantee scheme was launched in April 2021 and was initially supposed to end in December 2023, but was extended in last year’s Autumn Budget to 2025.

Since it was launched, 42,836 mortgages have been completed through the scheme, which made up 1.3% of all residential mortgage completions in the UK over that period, and 85% of purchases have been made by first-time buyers.

The scheme aimed to increase the supply of low-deposit mortgages, which were reduced during the pandemic as financial volatility made high-loan-to-value (LTV) lending more challenging.

It offers participating lenders the option to buy a guarantee on mortgages where a borrower only has a deposit of 5%. This will compensate lenders for a portion of net losses in the event of repossession.

The guarantee applies from 80% of purchase value of the guaranteed property and covers 95% of net losses.

Labour also reiterated its plans to build one-and-a-half million more homes, first dibs for local people on new developments and new planning officers funded by taxing foreign buyers.

Conservatives on housing

It comes after the Conservatives pledged a stamp duty freeze, along with not changing council tax bands, undertaking a council tax revaluation, and maintaining private residence relief, as part of its “Family Home Tax Guarantee”.

Chancellor Jeremy Hunt called on Labour to back the tax pledge, as it would “put families first and higher taxes second”.