Liberal Democrats launch housing scheme

Liberal Democrats leader, Charles Kennedy, has announced plans to create 100,000 affordable homes, as part of the party's housing policy.

The new scheme aims to help first-time buyers get a foot onto the housing ladder through a mutual ownership trust scheme.

People purchasing one of the new homes would provide a deposit – around 5% of the build cost of their home – and the monthly rent would be calculated on a percentage of salary, estimated to be around 30%. If the householder decided to move, they could sell their share, which would be linked to the local housing market, so that equity stakes would rise in line with local house prices.

The Liberal Democrats also have plans to introduce 'Golden Shares' in order to make housing available to those who would otherwise be unable to afford it. These schemes would offer a tier of affordable homes based on local, rather than external, market need.

Local authorities would be given more power to limit growth under the new plans and councils would be allowed to vary 'right-to-buy' discounts according to local needs. The re-use and conversion of existing buildings, rather than developing new sites, would also be encouraged.

Commenting on the new policy, Mr Kennedy, said: "Decent homes, decent communities, and the opportunity to own your own home. Liberal Democrat housing policy aims to make these aspirations a reality. We have a simple ambition: a decent home for everyone at a price within their means."

Mr Kennedy said that high house prices and lack of affordable housing stock meant that many people could not afford to purchases homes near their jobs or in the area where they were brought up. He added: "Our innovation is to create a completely new housing market to help people make the transition from renting to buying."

The Liberal Democrats' Housing policy – Affordable Housing in safer, Greener Communities – also includes plans to use surplus public sector land to build new homes; stop council tax revaluation and reduce VAT on repairs and conversions.

Conservatives Shadow Local Government Secretary Caroline Spelman claimed that the new proposals would add an £11,000 "stealth tax" on all new homes. She said: "This is typical of Lib Dem hypocrisy. They claim that they want to help people on to the property ladder, but the small print of their policies reveals how they intend to price even more people out of the housing market. They want to slap a costly new tax on housing which would hit those on lower incomes the hardest. For every new house, the seller would face an extra charge of £11,000 -most of which would be directly passed to the buyer."

The Conservatives proposals include plans to extend the 'right-to-buy' policy to over a million housing association tenants.

(KMcA/SP)