New scheme to help first time buyers

27 September 2004
Deputy prime minister John Prescott has announced a new government initiative allowing first-time buyers to get a foot on the property ladder by buying cheap new homes.

Speaking on the opening day of the Labour party conference in Brighton, Mr Prescott said the government was aware young people had been priced out of the market in recent years.

"It's our job to help some of those first time buyers who are unfairly priced out of the market. This is a new and exciting future for housing and for hardworking families aspiring to own their own homes," he said.

The government is to set aside publicly-owned surplus land for house building projects.

People unable to finance homes via mortgages are to be given preference.

Mr Prescott told delegates the average cost of a new home in London now stood at £218,000, three times the level when Labour came to power in 1997.

But the cost of building a new home has risen 60 per cent over the same period.

"It's been a gravy train for some - and it's got to stop. We must get these costs down," he said.

He pointed out that the number of first time buyers had fallen by nearly a third (27 per cent) last year.

Explaining the new initiative, he said: "When we assemble sites for development, we will make sure that some of the land is set aside for first time buyers at prices they could not otherwise afford.

"We own the land. We don't sell it off. We keep it in trust, but lease it for new housing. So the first time buyer pays the cost of building the house, not the full cost of the land.

"That's a new and exciting future for housing. A future which identifies Labour as the party of home ownership and public housing."

It is expected some 10,000 new homes will be built under the scheme.

Mr Prescott also announced the government would be ring-fencing more money for public-private funding for councils to build new homes for rent or sale.
© DeHavilland Information Services plc