Labour has added to its housing policy by announcing that it will start construction on one million homes by 2020 if it is elected.
The Opposition Party’s original pledge to build 200,000 new homes a year by 2020 followed the Labour-commissioned Lyons Review, which set out specific strategies to reach this goal. However, in a package of measures left out of the Party’s manifesto, Labour leader Ed Miliband has announced an increase that pushes the Party’s house-building goals further.
Speaking in Stockton on Monday (April 27), Mr. Miliband said: “We’re going to oversee a revolution in home ownership in this country. There’ll be the biggest house-building programme in a generation.”
The policy would be funded by a Future Homes Fund worth œ5bn and would be used to build ?a new generation of towns, cities and suburbs’, although there was no mention of funding for the infrastructure needed to create new communities.
Mr. Miliband also reinforced his Party’s belief that large developers hoard land to drive up prices, claiming that a Labour Government would say to house-builders ?either you use the land, or you lose the land.’
As well as increasing Labour’s house-building ambitions, Ed Miliband also announced plans to give first-time buyers who have lived in an area for more than three years “first call” on up to half of all new homes built in their area. This policy is designed to block overseas investors from snapping up new properties before local people are able to put an offer in.
Similarly, a ?Local First’ policy would mean that properties are only advertised locally before they are marketed overseas, to further encourage local expenditure on new homes.
Jeremy Blackburn, head of policy at the Royal Institute of Chartered Surveyors (RICS), said: “The promise of 1m homes by 2020 is an ambitious target, but Labour has not fully explained how they expect to remove obstacles to such a supply-side revolution.
“The details on First Call and Local First will be key, as on the face of it, these both look difficult to legislate for, and their efficacy could be undermined if they are only voluntary measures.”
In another move designed to further help first-time buyers – and potentially water down the Conservative Party’s ?pride in ownership’ aspect of its General Election campaign – a Labour Government would also abolish stamp duty for the first three years of the next Parliament for all first-time buyers of homes under œ300,000.
Labour believes this would benefit nine out of ten people buying their first home to the tune of œ5,000. The policy would cost the Government œ225m a year, which Mr. Miliband said would be found through a number of tax-related measures.
However, the last of the new policies outlined by Mr. Miliband has faced great criticism from across the house-building sector, due to the fact that it may inadvertently hike house prices up further.
Joe Sarling, senior analyst at the National Housing Federation, said: “The reduction of this [stamp duty] tax will actually increase prices overall, thus making the housing crisis worse.”
As buyers are likely to have extra money saved to cover a stamp duty tax, they are likely to then spend more on a home where the tax does not apply. This is therefore likely to increase house prices, as sellers will believe they can get more money for the property being sold. In Mr. Sarling’s words: “The Treasury is a loser as it receives less revenue. But sellers are winning as there is more money in their pockets.
He added: “The fundamental point here is
