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Labour to make banks deliver 125,000 new homes

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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.

  • 3 Comments

Readers' comments (3)

  • Ben Derbyshire

    The totem pole of housing policy initiatives reaches higher and higher; as this Labour initiative is stacked on top of an earlier Coalition initiative the whole edifice threatens to topple under its own weight!
    I reach for my copy of The Crossman Diaries and yearn for a time when we had a Cabinet Minister of Housing and a plan to deliver 400,000 homes a year, with the land, the finance and the industrial capacity in place to do the job.
    Ben Derbyshire.
    Managing Partner, HTA Design LLP
    Chair, The Housing Forum

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  • How is the desired increase to be delivered that is the question ? The major house-builders are at maximum. SME developers have been falling dramatically in number and operations and are unsupported by Banks or Treasury.
    The only possibility for large scale growth is the public sector or Housing Associations. It would be more interesting to know the vehicles for the planned growth will be supported. Otherwise this is vague platitudes.
    We all agree there is a housing crisis but what's the plan for solving it ?

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  • While it is all well and good saying we will offer financial assistance to the buyers of homes all the political parties have failed to set how who and how they are going to build all these homes. We have a shortage of skilled labour on building sites which will not be fixed in a 5 year cycle it needs real long term planning. We need to increase apprenticeships to school leavers, offer technical training to those 16 to 18 who don't want to do A levels and get Britain building. All we have achieved over the last few decades by offering available credit is push up the house prices.

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