Plan to help 3,302 young Londoners move out of home with 'permanent guaranteed' mortgage

A member of the public looks at houses for sale in the window of an Estate Agents
-Credit: (Image: JUSTIN TALLIS/AFP via Getty Images)

Labour has promised to introduce a new scheme to help at least 3,302 young people out of their parents’ house and onto the housing ladder in London if it were to form the next government. The 'Freedom to Buy' programme would reduce the need of first-time buyers to reply on cash gifts from relatives, the party says.

It would operate as a 'permanent mortgage guarantee scheme', with the state acting as guarantor for prospective homeowners who struggle to save for a large deposit. Labour adds that it would prove 'more comprehensive' than the existing 'Help to Buy' scheme, which is set to expire in June 2025.

Shadow housing secretary Angela Rayner said: "With five more years of the Tories, 3302 in London will be left with limited routes onto the housing ladder." A Labour spokesperson added: "For lenders, there’s little incentive to properly integrate the scheme into their offer to customers, as they expect it to expire in a matter of months

READ MORE: Keir Starmer wants to work much more closely with Sadiq Khan on London Underground and housing

Angela Rayner speaking on stage next to Keir Starmer
Angela Rayner claims that five more years of Conservative government would lead to 3,302 in London being 'left with limited routes onto the housing ladder' -Credit:Adam Toms/MyLondon

"Even though it’s repeatedly been extended, the lack of certainty means many lenders treat it as a peripheral product. On the other hand, prospective buyers struggle to find authoritative and accessible information about the scheme, and those who are saving to buy months and years in advance have no guarantee it will continue to exist when they come to buy a home.

"A permanent mortgage guarantee scheme that is an established part of the market will increase the availability and lower the cost of mortgages for buyers who don’t have access to a large deposit. In other countries like Australia and Canada, widespread use of mortgage insurance lowers the cost and increases availability of mortgage products for families with smaller deposits, supporting homeownership."

Tories hit back

But the Tories have hit back. Laura Trott, Chief Secertary to the Treasury, said: "Labour need to explain to first time buyers how raising their taxes by £2,094 will help them get on the housing ladder.

"The truth is, Labour’s tax raid will punish first-time buyers. What’s worse, their refusal to back our Family Home Tax Guarantee is the strongest signal yet that your home is next in Labour’s tax grab.

Chief Secretary to the Treasury, Laura Trott
Chief Secretary to the Treasury Laura Trott has hit back at Labour -Credit:Rasid Necati Aslim/Anadolu via Getty Images

"Only Rishi Sunak and the Conservatives have a clear plan, backed by bold action, to strengthen the economy, bring mortgage costs down and help more people get on the housing ladder.”

The Conservative claim that Labour's policies would lead to families paying more than £2,000 in extra tax has been called 'unreliable and false' by fact checkers. Full Fact adds that it is 'based on multiple assumptions’.

Chris Morris, its Chief Executive, said yesterday: “It's clearly unacceptable to present your own analysis as the conclusions of independent civil servants when it's not. Public trust in politics is hanging by a thread and a high-profile falsehood will turn even more people away from the democratic process. We want to see this corrected as soon as possible."

But the Tories have doubled down on the claim. The party claims that analysis of Labour’s spending plans shows the party has has a 'black hole' of £38.5 billion – the equivalent of £2,094 in taxes.

The party says the figure was reached 'using both official HM Treasury Costings, HMG figures and Labour’s own numbers, and a publicly quoted investment bank'.

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