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Labour’s Housing Plan is Heavily Criticised

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Yesterday Labour leader Ed Miliband presented the Lyon’s housing review promising to issue local councils with the authority they require to build hundreds of thousands of new homes where families can enjoy living and communities will thrive.

The party’s strategy will also include giving the councils extra powers to ban selling up to half of new build property to buy-to-let investors for a limited time frame.

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Mr Miliband claims the party’s future housing blueprint is a “comprehensive plan” and will fulfil the building of 200,000 new homes annually within six years and double the amount of first time buyers in the next ten years. 

Sir Michael Lyons said in his report: “We face the biggest housing crisis in a generation. We simply have to do better as a nation, not only because our children and grandchildren need the homes we should be providing now, but because greater house building will make a direct contribution to national economic growth.”

He went on to say: “My report sets out a comprehensive plan to tackle the key problems that underpin our failure to build enough homes. This will require strong leadership from central government alongside the delegation of powers and responsibility so that every community provides the homes they need. The recommendations will make more land available for new homes; unlock investment in infrastructure; and ensure that new homes are built when and where they are needed in attractive, thriving places. That will involve a more active role for local government in assembling land and in risk sharing partnerships with developers and landowners.”

Mr Miliband supported his colleague’s review yesterday by saying: “There has been a systematic failure to build the homes our country needs. Too much development land is held as a speculative investment when local people need homes. Too often the trickle of new developments that get completed are snapped up before people from the area can benefit, undermining support for much needed further development. And, for too many young families, the dream of home ownership is fading fast.”

The party leader added: “We will also make sure that communities get the benefit from new home development by guaranteeing that where communities take the lead in bringing forward additional developments, a significant proportion of homes on those sites cannot be bought by anyone before first-time buyers from the area have been given the chance. This is not only a fairer system, it is also one which will encourage local communities and local authorities to support the development that our country so desperately needs.”

However, his announcement to ban new build buy-to-lets should Labour win the election, has come under heavy criticism from experts who claim that it would be a disaster and cause more harm than good.

The proposal allows first time buyers two months priority, but housing experts say it will not work in practice.

Chief executive Richard Lambert from the National Landlords Association explained: “Without imposing new covenants or planning restrictions, which would risk scaring off investors, homeowners and lenders alike, it remains unclear how they could achieve this goal (of prioritising first-time buyers and blocking buy-to-let).”

“There is very little competition between landlords and first-time buyers. Restricting up to 50% of potential buy-to-let transactions seems unnecessary when just 14 per cent of total mortgage transactions are either buy-to-let or buy-to-let remortgages, and often the types of properties that landlords and first-time buyers are attracted to are very different.”

Housing and mortgage ‘guru’ Ray Boulger asks, “Why does Labour want to discriminate against tenants? Although there will be a number of people renting who want to buy, there will be some who choose to rent or have no chance of buying.”

Mr Boulger believes “Tenants will have less choice and rents will go up because there is less rental property. If you prioritise one part of the market over the other then you are putting the other at a disadvantage.”

About the author

Peter Davis Peter Davis is a Marketing Analyst at PaydayLoan123 specialising in financial products. Peter writes most of our articles as he stays up to date with the latest information. He enjoys most sports, particularly playing football and watching his favourite football team. Peter really like his food too as we have all witnessed first hand!

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