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  1. Election 2024
26 April 2015

Miliband pledges to scrap stamp duty for first-time buyers

Labour leader promises to remove charge on properties worth up to £300,000 as party steps up housing offensive. 

By George Eaton

At the start of the final full week of campaigning, Labour is maintaining its focus on housing, an issue that is playing a bigger role at this election than any other in recent history. After yesterday promising a cap on private rent increases, Ed Miliband will pledge to scrap stamp duty for almost all first-time buyers and to give them priority access to new homes – two strong policy offers that the Tories will struggle to match. He will also announce that Labour would begin construction on a million new homes by 2020 to deliver its commitment to build 200,000 a year by the end of the parliament. 

Stamp duty will be reduced to zero on properties worth up to £300,000, which Labour estimates would benefit nine in 10 first-time buyers by up to £5,000. The £225m cost would be met by tackling tax avoidance by landlords (through the introduction of a national register), increasing the tax paid by holding companies that buy property on behalf of investors, raising stamp duty on foreign buyers from outside the EU by at least 3 per cent and reducing the tax relief that rogue landlords receive for repairs and upkeep when the properties they own are not up to the required standard. 

Labour’s “first call” policy would give first-time buyers that have lived in an area for more than three years priority access to up to half of all the homes built in their area. In addition, the “local first” policy would make it illegal to advertise properties abroad before doing so at home, increase taxes on foreign investors and allow local councils to charge 100 per cent more council tax on any homes that have been left empty for one year to discourage “buy to leave”.

In a speech in the ultra-marginal Tory seat of Stockton, Miliband will say: “There’s nothing more British than the dream of home ownership, starting out in a place of your own. But for so many young people today that dream is fading with more people than ever renting when they want to buy, new properties being snapped up before local people get a look-in, young families wondering if this country will ever work for them. That is the condition of Britain today, a modern housing crisis which only a Labour government will tackle.” 

Of the stamp duty pledge, he will say: “It is simply too expensive for so many young people to buy a home today, saving up for the deposit, paying the fees and having enough left over for the stamp duty. So we’re going to act so we can transform the opportunities for young working people in our country. For the first three years of the next Labour government, we will abolish stamp duty for all first time buyers of homes under £300,000.”

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The aim of widening property ownership has historically been viewed as a conservative aspiration but it is one that Labour has also embraced. In an article for the New Statesman in 2012, Marc Stears, Miliband’s chief speechwriter, wrote: “The stable patterns of social interaction that are associated with communities of ownership are preconditions for the kind of social reciprocity that the left champions, as well as the more conservative disposition that is more usually commented upon.” It is also true that the majority of voters continue to wish to own their own home. No party with an interest in winning elections can afford to neglect this desire. Miliband has made it his ambition to double the number of first-time buyers to 400,000 by 2025.

Unlike the Conservatives, however, Labour has recognised the economic reality that, even with state assistance, property will remain prohibitively expensive for many. There are votes to be won in improving conditions for the UK’s 11 million private renters (who now outnumber their social counterparts). Thirty five per cent are swing voters and more than half of these (52 per cent) cite the cost of housing as their greatest concern. Even more notably for Westminster psephologists, there are 86 constituencies in which the incumbent party’s majority is smaller than the former group. Of this total, 37 feature on Labour’s target list of 106 seats. It is with an eye to capturing such constituencies that the party has promised to standardise three-year tenancies, to cap rent increases and to ban letting agents from charging fees to tenants. In London, in particular, where the party hopes to win almost all 12 of its target seats, this will help give Labour the edge. 

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