General Election 2015: Labour's Ed Miliband makes first-time buyers pledge to spare them from stamp duty

'It is simply too expensive for so many young people to buy a home today'

Nigel Morris
Monday 27 April 2015 11:11
'It is simply too expensive for so many young people to buy a home today' Miliband will say
'It is simply too expensive for so many young people to buy a home today' Miliband will say

First-time buyers will be spared stamp duty and moved to the front of the queue for new homes under Labour plans to ease the national shortage of affordable houses and flats, Ed Miliband will promise.

Claiming that millions of families are being priced out of the property market, he will commit a Labour government to scrapping stamp duty for 90 per cent of first-time buyers.

For three years the levy would be waived on properties worth up to £300,000 for people buying their first home.

With polls suggest a slight drift of support in recent days towards the Tories, Labour will attempt to turn the election campaign focus on to the cost of living in the final full week of campaigning.

The party believes the Tories are especially vulnerable on housing, with all generations dismayed by the cost to young adults of getting a foot on the housing ladder.

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Mr 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 are going to act so we can transform the opportunities for young working people.”

The party says the policy, which would come into force in 2016, would benefit around 700,000 first-time buyers in England and Wales over three years. The minority purchasing properties worth more than £300,000 would be liable to the full amount of stamp duty.

The move does not apply to Scotland, where Holyrood levies a land and buildings transactions tax on house sales and there is no special treatment for first time buyers.

Labour is also promising to introduce a “first call” policy, giving priority to local first-time buyers in the sale of half the new homes built in the area. Under its plans people who have lived in a neighbourhood for three years would have two months to buy the properties before they are put up for sale more widely.

“It is no good people seeing houses going up in their community, if they are then not able to buy them because they are snapped up by investors from overseas,” Mr Miliband will say. “In the Britain we believe in, houses should be lived in by families, not just set aside for speculators.”

The moves come after Mr Miliband detailed plans to ban real-terms rent rises by private landlords, announcing that a Labour government would replace “insecure” one-year tenancies with three-year contracts in which rents are fixed in advance.

The policy came under fire as groups representing landlords and letting agents warned it could drive up rents at the start of tenancy periods. And the campaign group Generation Rent, named after the expanding group of young people forced to rent by booming house prices, complained the idea was “riddled with loopholes”.

Boris Johnson, the Tory Mayor of London, denounced the rent control scheme as “drivel”. He said: “First of all you would discourage people from getting into the rental market.

“You would discourage the creation of new housing. All that would happen is that at the end of the three years, those that remained renting out their properties would jack up the rents even higher.”

Labour says the £225m annual cost of its stamp duty proposal would be met by tackling tax avoidance by landlords, increasing tax paid by holding companies on investment properties and cutting tax relief to landlords with substandard accommodation.

The party has promised to construct 200,000 homes a year, creating a “new generation of towns, garden cities and suburbs”.

In a speech in Stockton, Mr Miliband will accuse the Tories of presiding over the lowest rates of housebuilding since the 1920s and the lowest rate of home ownership for 30 years. Labour has also promised action against developers who obtain planning permission and then sit on land waiting for its value to increase. It would give local authorities the power to charge council tax on proposed homes where land has been banked for five years without building taking place.

The Tories have also committed themselves to building 200,000 houses a year by 2020. David Cameron has said an incoming Conservative government would extend the Right to Buy to 1.3m housing association tenants to give them “the security of their own four walls”.

Rent control: how would it work?

The rent for a property would be negotiated between the landlord and tenant, who would have the legal right to know what the rate for the previous tenant had been.

Tenancies would be fixed for three years, including a six-month probationary period, and rents would not be allowed to rise by more than inflation during the course of the agreement.

Tenants would be able to terminate contracts with one month’s notice (as at present) while landlords would have to give two months’ notice – and only if they can have a good reason.

There would also be provision for new tenants such as students or business people on temporary contracts to request shorter-term tenancies.

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