Tories and Labour clash on cheap homes for sale

The Conservative and Labour parties are going head to head on promises to build homes for discounted sale to first-time buyers, following the launch of the Conservative manifesto yesterday.

In the Tory manifesto, the party spelt out plans to allow councils to use planning contributions to “discount homes in perpetuity by one-third for local people who cannot otherwise afford to buy in their area”.

Last week’s Labour manifesto pledged to “build more low-cost homes reserved for first-time buyers in every area, including Labour’s new discount homes with prices linked to local incomes”. Shadow housing secretary John Healey told the Guardian on Sunday that this policy would see homes made available at as little as 50% of the market cost of an equivalent home, depending upon local affordability.

Healey said the size of the reduction would be dependent on the gap between earnings and house prices in the local area, with the local authority able to choose to target them at key workers such as nurses or teachers if desired. Last year the party set out plans for “FirstBuy” homes, discounted so that mortgage payments are no more than one-third of local incomes.

He said: “Labour’s new discount homes will give hope to aspiring first-time buyers on ordinary incomes who have been failed by the Tories over the past decade. Housing should be for the many, not the few, so a Labour government will cut the price of a first home for working people and lock in the discount to help future first-time buyers too.”

The Conservative Party manifesto pledged to rebalance the housing market toward homeownership. It said: “For the UK to unleash its potential, young people need the security of knowing that homeownership is within their reach – that they too can have a tangible stake in society, can be rooted in their communities and have a place to raise a family.”

Both promises have echoes of David Cameron’s failed Starter Homes programme, which promised the construction of 200,000 homes for first-time buyers to purchase at a 20% discount to the market rate. The National Audit Office recently published a report showing that not a single Starter Home was ever actually constructed.