The Conservatives will seek to cut costs for first-time property buyers in an appeal to younger voters ahead of the general election, as the number of people becoming homeowners falls to a 10-year low.
With the cost of mortgages having soared in recent years, housing secretary Michael Gove has said the government will “definitely” have a new offer for prospective homeowners in place before the country heads to the polls next year.
The number of first-time mortgages has plummeted by a quarter in the past year to its lowest level since 2013, according to trade body UK Finance, as higher interest rates compound the pain of house prices reported to have soared from an average of £264,000 to more than £300,000 in just two years.
The Tories ‘must’ offer more help to prospective homeowners, Michael Gove has said— (Getty)
Against this unforgiving backdrop, YouGov polling for The Times finds that just 11 per cent of 24 to 49-year-olds say they will support Rishi Sunak’s party at the next election, compared with 43 per cent of over-65s.
Mr Gove told the newspaper that, while longer-term fixed-rate mortgages could help first-time buyers, this has been impossible in recent years because of rising interest rates and concern about fuelling inflation.
“We have been asking the question, how can we ensure that people with decent incomes who are finding it difficult because of the scale of deposit required can get on to the housing ladder?” he said.
“I don’t want to pre-empt anything … but it’s about looking at some of the rigidities in the mortgage market which they haven’t got in other jurisdictions.”
Asked whether the Tories would be able to go into the next election promising more help for first-time buyers, he replied: “Oh yes, we must. Definitely.”
Housing secretary Michael Gove’s assertions were echoed by other Tory sources— (Jordan Pettitt/PA)
This was reportedly echoed by a Treasury source, who told the paper that chancellor Jeremy Hunt had considered further help for first-time buyers before the autumn statement in November – but had decided against it so as “not to do anything that would pull against the Bank’s attempts to reduce inflation”.
“But as we move to a more stable environment we have got more options available to us. It certainly makes sense politically to do something,” the source told the Times. “It is absolutely something that we need to have an offer going into the next election.”
Ministers are reportedly exploring a US-style scheme to provide government support fixed-term mortgages of more than 25 years to cut deposit costs, or resurrecting a form of the Help to Buy scheme, which was closed to new prospective owners last year.
The plans are expected to be announced either in Mr Hunt’s March Budget or in the Tory election manifesto.
Drawing up battle lines ahead of next year’s ballot, shadow housing minister Matthew Pennycook also promised on Wednesday that Labour would “slash the discounts” on the Tories’ Right to Buy scheme back to 2012 levels for long-term inhabitants of social housing.
“We think on principle that if you’re a long-term tenant who has been in the property for 30 years or whatever, you should have the right to buy at a reasonable discount,” he said.
Mr Pennycook also pledged that Labour would liberalise planning, reinstate building targets for local authorities, and release “lower-quality greenbelt land” for housing construction, while giving priority to local residents for off-plan new-builds.
The party would also raise the surcharge on stamp duty for non-residents from 2 to 3 per cent, and hand the estimated £25m raised to local authorities to hire 300 new planners in a bid to reverse the decline caused by public spending cuts.
