Labour has pledged to channel the proceeds from the newly-announced Help to Buy Isa into building 125,000 new homes for first-time buyers.
In a speech in Warrington on the weekend, Labour leader Ed Miliband promised to build at least 200,000 homes by the end of the next parliament.
He said he would make lenders that offered the Help to Buy Isa invest in new homes in return. He calculated the returns to be around £5bn, which would provide finance for 125,000 new homes.
The Labour leader also said he would issue a ‘use it or lose it’ warning to developers who hoard land and would create a “new generation of towns, garden cities and suburbs creating over half a million new homes”.
Miliband said: “There are now 11 million people who rent their homes, most of whom say they would like to buy. There are almost 3.5 million young adults living with their parents. If we keep going as we are, the average house price will be 14 times the average wage by 2020. No wonder people can’t get the start they need. There’s no bigger symbol that our country doesn’t work for working people than young people not being able to get a start with a home of their own. Our plan is the first real plan for housebuilding in a generation.”
In last month’s Budget, Chancellor George Osborne outlined plans for the Help to Buy Isa, which will launch in the autumn. The Government has promised to give first-time buyers £50 for every £200 saved in the Isa, to a maximum of £3,000, if they use the savings to buy a home.