Labour has accused the government of promoting “sky high mortgages” instead of providing stable accommodation for younger households.
A new mortgage guarantee scheme to help buyers with deposits as low as five per cent is to be unveiled by Chancellor Rishi Sunak on Wednesday. It is not aimed solely at first time buyers but is expected to help that sector more than any other.
The Chancellor says the government will allow new and existing owners to buy properties valued up to £600,000 with the scheme and says: “Owning a home is a dream for millions and we want to help as many people as possible.”
However Thangam Debbonaire - Labour’s shadow housing secretary - says: “Home ownership has fallen in the decade the Conservatives spent weakening the foundations of our economy.
“If the Chancellor wants to help young people get on, he should deliver a Budget with a relentless focus on jobs and growth.
“What young people need to get on is the secure future that comes with a decent job and genuinely affordable new houses to be built for them to make homes of, not going back to the days of sky high mortgages.”
The Sunak proposal has also won short shrift from rent activist Dan Wilson Craw, deputy director of the Generation Rent campaign group, who tweets: “This is real ‘Let them eat cake’ stuff from the government - in a week when we learned that 715k private renters don't get enough Universal Credit to cover the rent. Higher property values for existing homeowners. Still nothing for renters in debt to their landlord.”
Some commentators have likened the new low deposit proposal to Help To Buy, suggesting it may be more effective at generating house builder profits than actually making homes more affordable for first time buyers or others - although the new Sunak scheme is not expected to be restricted to new build property purchases.