As this year’s general election looms ever closer, parties are putting forward more and more alluring pledges in attempt to encourage voters and gain support. One of David Cameron’s and the Conservative party’s latest pledges is to expand a programme designed to provide new home owners under the age of 40 with cumbersome discounts on first-time purchases. In this vow, Mr Cameron promises 200,000 new cut-price starter homes for first-time buyers in the next five years.
Generation Rent
The youth generation of today has been labelled ‘Generation Rent’ in the property market, due to the difficulty many of our youngsters experience when trying to find an affordable first home. It is because of this fact that David Cameron has decided to double the initial amount planned to assist our generation of young renters and provide 200,000 cut-price homes before 2020.
The plans would see this number of houses offered at a 20% discount rate for first-time buyers throughout the next parliament. House prices will be capped at £450,000 in the London area and £250,000 everywhere else. Home owners will be forced to pay back this discount if they sell their home within five years. This plan has been designed to coincide with the current Help to Buy scheme; providing financial support on mortgage lending and helping first-timers get on the property ladder.
Labour Heavily Critical
As you would perhaps expect, particularly in the lead up to the general election, this pledge has been harshly criticised by the Labour party who have accused the Conservatives of announcing “uncosted and unfunded” propositions. This accusation follows on from a Sky television interview with Dermot Murnaghan, when Tory chairman Grant Shapps was unable to reveal how the proposal will be funded, despite being asked numerous times.
The construction industry has also responded with a fair amount of scepticism. Many industry experts and leading figures believe that building 200,000 new homes is extremely ambitious in the given time period. Despite this, the Labour party have retaliated with their own pledge as Ed Miliband promises to increase the number of homes built annually to 200,000. They plan to do this by challenging land banking, by launching a council-house building scheme and by building more garden cities.
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