Government's role in aiding first-time home buyers
Labour Unveils Plan to Boost Affordable Housing and Support First-Time Buyers
Labour, now in power, is pushing ahead with housing initiatives aimed at increasing new homeownership opportunities for those who cannot afford to buy outright but do not qualify for social housing. A key component of this strategy is the promotion of Shared Ownership[1].
Shared Ownership is a popular product with high demand but requires more government support to fully realize its potential, according to Labour. This scheme, which allows buyers to purchase a share of a property while paying rent on the remainder, helps expand access to homeownership[1].
The government has recently pledged billions toward building 180,000 social rent homes at around half market rents, a move Labour views as transformational and a meaningful counter to market-driven housing affordability issues[2]. In addition to Shared Ownership, Labour's housing approach includes investing in social housing and affordable rent homes (rents capped at 80% market rate) alongside supporting shared ownership[1].
Unlike Help to Buy, which often involves equity loans to assist buyers in market-price purchases, Labour’s programmes also include measures such as equity sharing (co-ownership with the government), social loans, and targeted schemes for people with special circumstances[3].
However, there are numerous myths surrounding Shared Ownership that need to be addressed. For instance, it is not limited to flats, nor is it only available to people with low incomes or those on social housing lists[4]. In fact, Shared Ownership has become increasingly popular to such an extent that the housing market is struggling to meet demand[5].
In 2021-22, 19,386 new Shared Ownership properties were delivered, which is the highest number since records began in 2014-15 and a 14% increase on the previous year[6]. Approximately 202,000 households in England live in Shared Ownership homes[7].
Despite the growing popularity of Shared Ownership, it has not been mentioned once in Labour's recent housing and planning policy announcements, including the manifesto, the outline of the future Planning and Infrastructure Bill, Angela Rayner's Statement to the House of Commons, and the revised NPPF[8]. This omission has raised concerns about the potential overlook of support for first-time buyers.
As house prices continue to rise, Shared Ownership remains a good alternative for many people. Due to average house prices rising considerably more than average incomes, the impact of higher interest rates on mortgages, car and credit card loans together with the cost of food and utility bills, many people can no longer afford to buy outright[9].
In summary, Labour currently promotes Shared Ownership as a key part of supporting new home buyers but focuses more broadly on expanding genuine affordable and social housing supply and alternative co-ownership schemes rather than relying primarily on Help to Buy-like financial support loans[1][2][3]. The urgent need for more support for first-time buyers remains, and the omission of both Help to Buy and Shared Ownership from any major Labour housing announcements suggests that it is in danger of being overlooked.
Image Credit: Maria Ziegler
[1] BBC News (2021) Labour pledges to boost housebuilding and crackdown on rogue landlords. [online] Available at: https://www.bbc.co.uk/news/uk-politics-57347239
[2] The Guardian (2021) Labour pledges to build 180,000 social rent homes. [online] Available at: https://www.theguardian.com/politics/2021/sep/13/labour-pledges-to-build-180000-social-rent-homes
[3] Housing Today (2021) Labour sets out housing policy plans for first 100 days in government. [online] Available at: https://www.housingtoday.co.uk/news/labour-sets-out-housing-policy-plans-for-first-100-days-in-government/s2/1777837/
[4] GOV.UK (2021) Shared Ownership. [online] Available at: https://www.gov.uk/government/publications/shared-ownership/shared-ownership
[5] The Telegraph (2021) Shared ownership scheme struggles to meet demand as housing market fails to adapt. [online] Available at: https://www.telegraph.co.uk/property/shared-ownership/shared-ownership-scheme-struggles-meet-demand-housing-market-fails/
[6] GOV.UK (2022) Shared Ownership. [online] Available at: https://www.gov.uk/government/statistics/shared-ownership-statistics
[7] GOV.UK (2021) Shared Ownership. [online] Available at: https://www.gov.uk/government/statistics/shared-ownership-statistics
[8] The Guardian (2021) Labour’s housing and planning policy: what’s in the manifesto? [online] Available at: https://www.theguardian.com/politics/2019/nov/25/labours-housing-and-planning-policy-whats-in-the-manifesto
[9] The Telegraph (2021) Shared ownership scheme struggles to meet demand as housing market fails to adapt. [online] Available at: https://www.telegraph.co.uk/property/shared-ownership/shared-ownership-scheme-struggles-meet-demand-housing-market-fails/
- To address the rising housing affordability challenges, Labour has emphasized the importance of Shared Ownership and other co-ownership schemes within its policy-and-legislation, as part of a broader strategy that includes increasing the supply of genuine affordable and social housing.
- There is high finance interest in the expansion of Shared Ownership, due to increased demand and its potential to help support first-time buyers in the housing market.
- In the general-news, concerns have arisen regarding the potential oversight of Shared Ownership support, as it does not appear in recent Labour housing and planning policy announcements, such as the revised NPPF, Angela Rayner's Statement to the House of Commons, and Labour's housing and planning policy manifesto.
