Can either party give first-time buyers hope?

If the cliché of “the first step is the hardest” applies anywhere, it certainly applies to the housing market. The Building Societies Association says that first-time buyers are facing the toughest conditions in 70 years, with the average age of a first-time buyer in the UK being 34, up from 32 in 2012 and from 30 in 2007. Indeed, without two incomes and/or parental help with a deposit, a place of one’s own can seem like an unobtainable dream.

The reasons for this state of affairs could be the subject of its own weighty tome, with each part of the political spectrum having its own ideas on causes and solutions. It is undisputable, however that this segment of the housing market in particular needs fixing. With Keir Starmer still looking to be the most likely prime minister after the 4^th of July, will a change of government change the fortunes of first-time buyers in a significant way?

With most first-time buyers looking at flats rather than houses, one of the key aspects of housing policy is their approach to leaseholds. While the Conservatives have promised to end the system altogether with Michael Gove calling it “outdated” and “feudal”, they have failed to deliver. While the Leasehold and Freehold Reform Act contains positive measures extending the default length of a lease and making it cheaper to convert leaseholds into freeholds, leasehold flats remain. Labour initially pledged abolition and replacement with commonhold too, saying it would come within 100 days, but have since rowed back. They remain adamant that they will take action at some point, but it seems that the issue is, as with the Conservatives, not a priority.

Although first time buyers will have to wait to see what the future holds with regards to tenure things would look up under Labour for those who thought that time was running out on the Government’s mortgage guarantee scheme. First introduced by the Conservatives in 2021, the scheme works through the state offering to be a guarantor for buyers and covering some of the costs if a home gets repossessed. This both encourages lenders to offer deals for smaller deposits and helps those who can afford monthly mortgage payments but struggle to save large sums while renting into their first home. In an impressive piece of political manoeuvring, Labour have taken this Tory policy and recast themselves as its champion, with little mention from the current government as to its actual origins. However, it is worth noting that this policy has not exactly transformed the property landscape in the years since it was introduced, raising doubts as to whether this effective sounding policy would actually achieve anything.

While this move could help those for whom accruing a deposit was the chief hurdle to owning their own home, that is only half the story. Mortgages are capped by the Bank of England at 4/4.5 times one’s salary, meaning someone on the average full time salary of £35,724 and a £20,000 deposit gives a maximum spend of a smidge over £180,000. While to be fair, this is perfectly sufficient in parts of the country, property searches in and around London at this price band mostly generate house boats. Indeed, industry data suggests that this state manipulation of the markets in in fact driving prices higher.

While both main parties have measures in their manifestos to help those without a deposit, no assistance seems forthcoming for those who are told that they cannot afford monthly payments roughly equal to the rent they already pay regularly. Given that, at present, the average property costs seven times the average person’s salary, the 4.5 times cap Cleary presents a significant barrier to many. Despite this, there has been no talk from Labour or the Conservatives of ending the Bank of England’s power to cap borrowing at that level, so the status quo looks set to continue in that regard.

Ultimately, improving the terms of buying a flat or making getting/paying a mortgage easier is of little help if there simply aren’t enough suitable homes available for those who want to buy them. The broad building commitments of both main parties are remarkably close with Labour pledging 1.5m new homes over the next five years, near to the 1.6 promised by the Conservatives. Labour has the advantage of being able to point to the government’s failure to meet housing targets in the past, while Rishi Sunak can at least cite programmes such as the First Homes Scheme, whereby first-time buyers can get 30% – 50% off the cost of new build home. The Conservatives have also pledged to keep the stamp duty threshold at £425,000, but as this only affects 20% of first-time buyers, its appeal will be relatively niche compared to other measures. Labour’s plans also include the return of national and local housing targets, with local plans and the National Planning Policy Framework (NPPF) updated to strengthen the presumption in favour of sustainable development. This could have a positive effect on overall housing supply, including those suitable for first time buyers, while not specifically aimed at that group.

Both parties have some appealing offers to make to first time buyers, but one cannot escape the fact homes have become less and less affordable over the 14 years the Conservatives have been in government. While the government cannot be solely blamed for the vagaries of the housing market, enough people want change in this area that they are willing to try any reasonable alternative to the current situation. While it is by no means clear that a victorious Kier Starmer would be able to cut the Gordian knot which is the UK housing market, there is feeling among many aspirant homeowners, be it out of optimism or desperation, that Labour offers them the better chance of a place of their own.