Affordability of Housing: First-time Buyers

Treasury – in the House of Commons on 15th November 2022.

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Photo of Toby Perkins Toby Perkins Shadow Minister (Education)

What recent assessment he has made of the affordability of housing for first-time buyers.

Photo of Andrew Griffith Andrew Griffith The Economic Secretary to the Treasury

The Government are committed to helping as many first-time buyers on to the housing ladder as possible. We are investing £11.5 billion in building more of the affordable homes that the country needs. First-time buyers can access first-time buyer’s relief for stamp duty land tax, which means that 90% of first-time buyers need pay no stamp duty at all.

Photo of Toby Perkins Toby Perkins Shadow Minister (Education)

For so many younger people, even those on really good wages, the idea of owning their own house is now a pipe dream. We have 1 million more people in private rented accommodation and, since 2010, 800,000 fewer under-45 households own their own home. What is it about 12 years of Conservative government that has been so brutal for young people with ambitions to own their own home?

Photo of Andrew Griffith Andrew Griffith The Economic Secretary to the Treasury

The Government are very conscious and very supportive of people’s desire to own their own home, which is why we have made so many interventions on affordability. Underlying that is the strength of the economy, which offers great employment prospects for those who seek to work hard, to save and, ultimately, to purchase their own home. We are on their side.

Photo of Pat McFadden Pat McFadden Shadow Chief Secretary to the Treasury

The consequences of September’s disastrous mini-Budget continue to be felt, as we will see in the autumn statement on Thursday—the third Budget statement in two months from the fourth Chancellor since the summer, presided over by the fifth Prime Minister in six years. Whatever they represent, it is certainly not stability.

Mortgage rates are still well above what they were before the mini-Budget. I have a constituent who is a first-time buyer, and he is facing a £200-a-month increase on his mortgage quote compared with before the mini-Budget. Why should my constituent, and thousands like him, pay the price in their mortgage payments for the economic damage caused by the Government’s recklessness?

Photo of Andrew Griffith Andrew Griffith The Economic Secretary to the Treasury

The right hon. Gentleman does this House and his constituents a great disservice with that characterisation, which did not mention once the tragedy of the events caused by Russia’s invasion of Ukraine and the fact that we are coming off the back of an extraordinary intervention to protect this country, jobs and businesses from covid. In the future, when he characterises the economy, he owes it to all of us to be more proportionate.

Photo of Pat McFadden Pat McFadden Shadow Chief Secretary to the Treasury

I know that, after 12 years, the Government quite like stealing our ideas, such as the windfall tax and the energy price freeze, so let me offer a suggestion. High deposit demands, increased unaffordability due to price rises and, now, rising mortgage rates all mean it is increasingly difficult for first-time buyers to get on the property ladder, so will the Government consider Labour’s proposal for a mortgage guarantee scheme, as operates in countries such as Canada, to help first-time buyers get on the property ladder and to protect them from negative equity in times of market turbulence? Would that not be a practical idea to stop people being trapped in the private rented sector and to help them buy a home of their own?

Photo of Andrew Griffith Andrew Griffith The Economic Secretary to the Treasury

Not only is that a good idea, it is a Conservative idea that we have already introduced. I am glad the right hon. Gentleman has belatedly latched on to it.

Photo of Philip Dunne Philip Dunne Chair, Environmental Audit Committee, Chair, Environmental Audit Committee

With interest rates rising around the world, many others countries are considering more imaginative ways of enabling those with mortgages to continue to pay. Will my hon. Friend look at the schemes operating in the United States that allow lenders to extend the duration of a mortgage to allow payments to remain on an even keel and, therefore, to remain more affordable for hard-pressed households?

Photo of Andrew Griffith Andrew Griffith The Economic Secretary to the Treasury

Yes, I will do that. My right hon. Friend is right to point to the fact that mortgage rates have been rising throughout the world. This Government will always be on the side of trying to protect people with mortgages. Lenders are responsible and are willing to extend. The advice is that people should always speak to their lender if they have difficulties. I will certainly look at the case he mentions.