Labour Party homes policy: How we will keep mortgage rates low and help first-time buyers with a new Freedom to Buy scheme

Keir Starmer and Angela Rayner standing in a kitchen talking with two women

Labour knows how hard it has been for families hit by spiking mortgage costs. Working people cannot afford a repeat of Liz Truss’s disastrous mini-budget that sent mortgage rates skyrocketing. 

That is why Labour’s first step for change is delivering economic stability, with tough spending rules to keep mortgage rates as low as possible.

We will deliver economic stability with tough fiscal rules, robust economic institutions, and a new fiscal lock so we never repeat the disastrous mini-budget.

We will also help first-time buyers and young people with a new Freedom to Buy mortgage guarantee scheme and give local people first-dibs on new homes in their area.

How the Tories are threatening increasing mortgages rates again

Millions of people are still suffering the financial consequences of Liz Truss’s mini-budget: those hurt by rocketing mortgage rates, and those people priced out of buying their first property. The average family remortgaging is paying £240 in higher mortgage costs after the Conservatives crashed the economy, and census data shows for the first time that the majority of young adults aged 20-24 now live at home with parents.

Under Rishi Sunak, the Tories are determined to make the same mistake again.

Despite witnessing the disaster of Liz Truss’s premiership, Rishi Sunak’s manifesto made £71 billion worth of unfunded policy pledges, which will see families’ mortgages rising by £4.8k over the next Parliament.

How Labour will help first-time buyers

Labour will reform planning rules to build 1.5 million more homes, as part of our mission to get Britain building again, give young people first dibs on new housing developments and help them get onto the property ladder with a permanent Freedom to Buy mortgage guarantee scheme.

Our plans would support 80,000 young people to get on the housing ladder over the next five years.

Here’s how Labour will help first-time buyers:

  • Planning reform to build 1.5 million homes.
  • A Freedom to Buy Scheme to help people secure a mortgage.
  • First dibs for local people on new developments, ending the farce of entire developments sold off to international investors before local people get a look in.
  • Tax foreign buyers to fund planning officers: by taxing foreign buyers pricing out young people, we can fund new planning officers to approve homes next generation needs.
  • Reform compulsory purchase rules to get homes built.

Labour’s Freedom to Buy permanent mortgage guarantee scheme will help working people who struggle to save for a large deposit.

The Tories are planning to axe the current mortgage guarantee scheme in June 2025 – denying 65,000 young people the opportunity to own their own home. In contrast, Labour will introduce a permanent, mortgage guarantee scheme, helping prospective homeowners who struggle to save for a large deposit. 

We will work with lenders and the property industry to increase uptake of the scheme and ensure they confidently offer it to prospective buyers.