British PM David Cameron woos voters with new discount homes

PUBLISHED : Wednesday, 01 October, 2014, 4:23am
UPDATED : Wednesday, 01 October, 2014, 4:23am

British Prime Minister David Cameron pledged to build 100,000 new homes and offer them to younger first-time buyers at a 20 per cent discount if his party wins a national election in May.

The extension of the ruling Conservative's "Help to Buy" scheme, which is meant to get people on the housing ladder, was announced on Saturday, the eve of the party's annual conference, the last before the vote.

Property is a politically potent issue in a country facing a housing shortage that has pushed prices nearly 10 per cent higher nationally in the past year, and much more in London.

The "Starter Homes" plan would only cover houses built on brownfield sites, land already set aside for commercial purposes, in England, the Conservatives said in a statement.

Buyers aged under 40 would get the discount on the market value, made "possible because a Conservative government will exempt them from taxes, reduce development costs and allow the release of cheaper brownfield commercial land to build these homes on", the party added.

The "Help to Buy" mortgage guarantee scheme was brought in last year to help would-be buyers struggling to pay large deposits. Some critics said it did nothing to spur newbuilding.

A report by a former Bank of England policymaker published in March said the country needed one million homes. Construction of homes in England slumped after the 2007-09 financial crisis and is still struggling to recover. In 2013, 110,000 homes were built, the second-lowest reading since records began in 1978 and down from 177,000 in 2007.

Stewart Baseley, the chairman of the Home Builders Federation, said the house-building industry welcomed the Conservative plan.

"Enabling more first-time buyers to realise their ambition of home ownership and introducing policies that allow more land to come forward and increase house building would clearly be positive," he said.

As deposits and property prices have risen, so, too, has the age of those entering the housing market. The average age of a first-time buyer is 30 nationally, up from 28 in 2009. It is 32 in London.