Miliband to pledge huge housebuilding programme

Ed Miliband will promise to construct hundreds of thousands of new homes if Labour gets into power at the next general election.

According to a report in the Financial Times, the Labour leader will announce the pledge in his speech to the party conference in Brighton this week. 

The theme of the speech will reportedly centre around the rising cost of living, in which he will also repeat a pledge to increase the national wage and abolish the “bedroom tax”.

Separately, shadow chancellor Ed Balls last week suggested the second part of Help to Buy, a £130bn mortgage indemnity guarantee scheme which will allow borrowers to purchase homes worth up to £600,000, will be reviewed under a Labour government.

Balls reportedly said the current maximum amount allowed under the scheme, which will launch in January, is “too high” and would most likely create a housing bubble in the already vibrant markets of London and the South East.

Business secretary Vince Cable questioned whether the Government should introduce the second part of the scheme earlier this month.

While the housing market is still fairly stagnant in most of the UK, London has seen house prices grow by around 8 per cent in the last year, according to the Office of National Statistics.

Under “Help to Buy 2”, the Government will guarantee up to 15 per cent of the purchase price, with the borrower putting down a deposit of between 5 and 15 per cent. It will be available to purchase both new-build and older properties and will run for three years.

The first part of Help to Buy began operating in April and offers buyers a 20 per cent equity loan, interest free for five years on new homes worth up to £600,000 with buyers putting down a deposit of just 5 per cent.