Labour pledges stamp duty help for first-time buyers

Ed Milband: "Houses should be lived in by families, not bought up by speculators"

Ed Miliband says a Labour government would exempt first-time buyers in England, Wales and Northern Ireland from paying stamp duty when buying homes below £300,000, for three years.

Locals would also get "first call" on half of new homes in their area while foreign buyers would face more tax.

The Labour leader said it would revive the "fading dream" of home ownership.

The Conservatives said Labour's plans were unfunded and they had cut stamp duty for most people since 2010.

The Lib Dems and UKIP also attacked the proposals, while business groups accused all the parties of using housing to try and win votes without thinking through the consequences.

In other election news:

In a speech in Stockton, Teesside, in which he unveiled the party's new pledge card, Mr Miliband said Labour was on the side of young people struggling to get on the housing ladder.

"There's nothing more British than the dream of home ownership, but for so many people in our country that dream is fading," he said.

"It's the right thing to do to enable people to get back on the housing ladder and that's what a Labour government will do."

Policy guide: Where the parties stand

Q&A: The housing issues that matter in the election

The centrepiece of Labour's plan is a pledge to give first-time buyers a stamp duty "holiday" on purchases of under 300,000, which it says will save them an average of £5,000.

The measure would apply only in the first three years of a Labour government and, the party says, would cost £225m.

It would be funded by a clampdown on landlords who avoid tax, a cut in tax relief for landlords who fail to maintain properties and increased taxes for foreign property investors - with stamp duty on buyers from outside the EU rising by at least 3%.

'Two-month window'

The changes would not apply to Scotland, where stamp duty has been devolved to the Scottish Parliament and there are different rates. But it would take effect in Wales, where stamp duty is not due to be devolved until 2018, and Northern Ireland as well as England.

Buyers in England, Wales and Northern Ireland currently pay nothing on the first £125,000 of a home's value and are then charged on a sliding scale, starting with 2% on the next £125,000, 5% on the following £675,000, 10% on the next £575,000 and 12% on homes over £1.5m.

Another Labour proposal is to give first-time buyers who have lived in an area for more than three years first refusal on up to half of homes built there, while ensuring new properties are not advertised abroad before they are in the UK.

PA

There were about 326,000 first-time buyers in 2014

"People are fed up with homes in their local community being built but snapped up by out-of-town buy-to-let landlords," Mr Miliband said.

Labour says it will change national planning policy to give councils the power to ensure local first-time buyers have priority access to a share of the homes built, with a window of about two months for them to register their interest.

Shadow Communities Secretary Hilary Benn told the BBC that Labour would consult on the details but the proposals would have to "strike a balance" between supporting owner-occupation and recognising the importance of new housing to economic mobility.

There were 326,500 first-time buyers in 2014 and according to the latest figures, they are currently paying an average price of £205,000.

According to Land Registry figures published in February, the average house price in England and Wales is £180,252 and is below £300,000 in every region except London. The figure in the capital is £463,872.

On the basis of current market figures, the Conservatives said the stamp duty exemptions would cost £1,600 for every home purchased, at a total cost of more than £520m - twice as much as Labour is claiming.

The last Labour government, they said, had tried a similar stamp duty holiday in early 2010 and it had "failed" to increase affordability.

"Coming from the people who crashed the housing market and repeatedly raised stamp duty, this won't distract from Ed Miliband's inability to say what deals he will make with the SNP to prop him up in Downing Street," a party spokesman said.

"In contrast to Ed Miliband's gimmicks, because of our balanced economic plan, we've been able to deliver lasting reforms - cutting stamp duty for 98% of people who would have paid it."

On Sunday, Labour pledged to introduce standard three-year tenancies with rent rises capped at inflation, a move the Conservatives said was destined to "force up rents", reduce investment in housing and lead to poorer-quality accommodation.

'Vote-buying'

But the Green Party are also promoting a similar approach, as part of a package of measures aimed at making the private rented sector fairer for tenants.

The party said: "As it stands, the private rental market is structured in a way that benefits landlords over tenants, and treats homes as investment vehicles. As more people rent, rather than own, their homes, it is vital that we correct this imbalance."

The Conservatives have made an extension of right-to-buy - the scheme offering council house tenants the chance to buy their home at a discount - to about 1.3 million people who live in housing association accommodation, a key feature of their manifesto.

They are also pledging discounted homes for first-time buyers, a £1bn fund to "unlock" sites for 400,000 brownfield homes and an extension of the help-to-buy scheme aimed at first-time buyers.

The Lib Dems, who say they would increase house building to 300,000 a year and help young people living with their parents to raise cash for a housing deposit, dismissed Labour's stamp duty plans as "unfunded".

"No-one should trust Labour to deliver this commitment because their sums simply do not add up," a spokesman said.

And UKIP accused Labour of "uncosted and blatant last-minute electioneering", saying there was a real risk it would force house prices up.

The British Chambers of Commerce criticised both Labour and the Conservatives, saying their housing policies took little account of "the future consequences for individuals, investors, or businesses".

"With each passing day, we see yet more vote-buying policies from political parties of all colours," it said.

More on this story