Ed Miliband has pledged the Labour Party would create a £5 billion ‘Future Homes Fund’ to deliver 125,000 new homes underwritten by banks and building societies
The fund would draw in part on deposits from Help to Buy ISAs, chancellor George Osborne’s surprise new initiative to aid first-time buyers announced in last months’ budget.
Due to launch later this year, the new accounts will provide first-time buyers with up to £3,000 of public-funded top-ups if they save enough of their own money.
In a speech to a rally in Warrington at the weekend, Labour leader Miliband said that financial institutions would profit from the ISAs and that the proposed fund would help to pay back society with more housing.
‘The banks will benefit from the taxpayer support we will provide to help people save for their first home,’ he said.
‘In return, we will expect the banks to invest in homes for the next generation, unlocking £5 billion for 125,000 homes.’
Shadow housing minister Emma Reynolds subsequently added that Help to Buy ISAs would cost the taxpayer £2.2 billion, and that any bank or building society choosing to offer them would need to reinvest the savings in housing.
‘Labour supports help for first time buyers to get on the housing ladder, but this must be done in a way that builds more homes rather than simply stoking demand,’ she said.
‘Savers will be able to withdraw their money at any time but there will be a double benefit for saving in these ISAs, a financial bonus for saving and the money will be used to fund homes for their generation.’
In his Warrington speech, Miliband also repeated Labour’s longstanding pledge to increase housebuilding from its current level to 200,000 homes a year by 2020.
He added that if it won power at next month’s general election his party would create ‘over half a million new homes’ in a ‘new generation of towns, garden cities and suburbs’.
Miliband said housing would be Labour’s ‘top priority’ for additional capital investment.