The mortgage guarantee scheme is currently set to expire in June 2025, while it applies to homes worth up to £600,000.

It works by having the state act as a guarantor for prospective homeowners, giving lenders certainty that they will receive monthly mortgage repayments, thereby facilitating the availability of mortgages with a 5% deposit.

Labour said Freedom to Buy would help more than 80,000 buyers get on the housing ladder in the next five years.

Speaking on the first televised general election debate with Prime Minister Rishi Sunak, Labour leader Keir Starmer said: “After 14 years of Conservative government, the dream of homeownership is out of reach for too many hard-working people. Despite doing everything right, they can’t move on and up. A generation face becoming renters for life.

“My parents’ home gave them security and was a foundation for our family. As prime minister, I will turn the dream of owning a home into a reality.

“Our changed Labour Party will be on the side of the builders not the blockers, to get Britain building again. My Labour government will help first-time buyers onto the ladder with a new Freedom to Buy scheme for those without a large deposit, and by giving them first dibs on new developments.

“Labour backs hard work and ambition, and will clear the way for the opportunity to own a home. It’s time to stop the chaos, turn the page and rebuild Britain.”

300,000 housing target to return

The party also opted to reintroduce the pledge to build 300,000 homes a year, a promise made by the Conservatives in 2019 – which they failed to meet every year and eventually dropped altogether.

Labour pledged to meet this target by reforming planning rules, building on disused ‘grey belt’ (low quality green belt), fast tracking permissions on brownfield land, as well as building a new generation of new towns.

Simon Gerrard, managing director of Martyn Gerrard estate agents, said: “I have long been raising concerns that our children will have nowhere to live, and so it is very welcome to see the Labour Party introducing policy initiatives to build new homes.

“The planning reforms and targets that the policy has set are ambitious, but ambition is what we need given the dearth of housing stock available to everybody, and especially first-time buyers.

“We have heard similar policies from the government over the past 14 years, but these have consistently lacked any action, so it is hugely encouraging to see Labour prioritising this issue.”

Foreign buyers shunned for locals

Labour pledged to work with developers to give locals ‘first dibs’ on new developments, which it said would end the farce of entire developments being sold off to international investors before local people can get a look in.

The party also vowed to tax foreign buyers, signalling that the party will favour domestic buyers over those from overseas. Non-UK residents already pay a 2% stamp duty surcharge on new purchases.

Gerrard added: “The Labour party’s proposed policy to offer priority treatment to domestic first-time buyers over international investors is also a welcome change. Even on the rare occasions where housing has been permitted under the current government’s regime, all too often these have not actually provided opportunities for aspiring UK buyers to get onto the housing ladder.

“The lack of funding for councils has not helped the declining rates of housebuilding, and so dovetailing policy to prioritise UK buyers with providing additional funding for councils will supplement efforts to reach the ambitious housing targets that the Labour party has set.”

The next General Election will take place on the 4th July, with Labour being the strong favourites to win.

Via @PropertyWire