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Labour 'Freedom to Buy' pledge

Journalist: Anna Sagar, Mortgage Solutions / Specialist Lending Solutions

ended 08. June 2024

Interested in talking to mortgage brokers about Labour's pledge to make the mortgage guarantee scheme permanent as part of its Freedom to Buy scheme. 

  • Will it help more FTBs on the ladder?
  • How popular if the mortgage guarantee scheme?
  • What FTB support do you want to see from upcoming govt? 

3 responses from the Newspage community

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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
Housing policy is like building, it’s developed over time. This is a positive first proposal from Starmer but things need to be bigger and bolder, and there is plenty of scope. A buying scheme to the scale of Help to Buy, but with innovation, is ripe for announcement and home builder incentives, not just targets, should be released. Labour have an open goal they need to take advantage of here, but they are at risk of fluffing their shot.
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Mark Hosker
Mortgage Adviser at Cyborg Finance
The Labour 'Freedom to Buy' Scheme is similar to the one the Conservative Party launched in 2021 and is still in operation today. In the nearly three years since its launch, it has helped 32,836 households. Unless Labour is planning to make changes to help with the affordability of that large loan, I'm unsure how they plan to double that in one year.

It's a great scheme for when low-deposit mortgages are unavailable, but we have low-deposit mortgages, and making it permanent instead of a tool to be used in times of need could blunt the instrument.

The support First-Time Buyers need today is more related to income and affordability than deposit. The market has low-deposit mortgages, but it also has high mortgage rates and high house prices, making affordability the biggest issue for First-Time Buyers.
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Richard Thompson
Director at Abbeydale Mortgages
I believe the introduction of guarantee mortgages will have limited impact, as many lenders already provide 5% deposit mortgages independently of the freedom-to-buy scheme. Most first time buyers are likely aware of the existing options for 5% deposit mortgages from various lenders.

To truly benefit first-time buyers, enhancing affordability through a backed guarantee for lenders would be more effective. This approach would help improve affordability for first-time buyers and provide more meaningful support.