Councils should offer cheap, local-authority backed mortgages to help first-time buyers and bring in rent regulations, according to the shadow chancellor, John McDonnell.
In a speech at Labour’s state of the economy conference on Saturday, he will say the party wants to address the “freefall decline in home ownership among young people”, pointing to a number of Labour councils that are underwriting mortgages or lending money directly.
The idea of councils offering loans for property goes further than George Osborne’s Help to Buy scheme, which guarantees part of a mortgage to enable people to buy with smaller deposits.
McDonnell will say: “We’ll give local authorities the powers to impose local rent regulations where these are needed … but we have to also meet the aspirations of people to own their own home.”
McDonnell said he wanted to see councils following the example of Manchester, Sandwell in the West Midlands and Warrington in Cheshire by offering cheap, local authority-backed mortgages to first-time buyers in particular.
“With too many first-time buyers excluded from the housing market by high street banks, we’ll be looking at ways to securely expand local authority mortgage lending,” he will say.
During the conference, Jon Trickett, the shadow communities secretary, will announce that Labour is convening an economic forum of mayors with the aim of “solving the housing crisis”.
Jeremy Corbyn will give a speech about moving towards “new economics”, including greater public investment in modern industry.
“We want to see the reindustrialisation of Britain for the digital age,” the Labour leader will say. “That means putting public investment front and centre stage, driven by a national investment bank as a motor of economic modernisation, based on investment in infrastructure, transport, housing and the technologies of the future.”
