07 Oct 2020

UK prime minister Boris Johnson has promised the biggest increase in home-ownership in decades, vowing that new low-deposit mortgages will help two million more people buy their own homes.

Johnson used a major speech on Tuesday at the Conservatives’ annual conference, held virtually for the first time, to tap into the party’s traditional focus on home ownership. “We will help turn generation rent into generation buy,” he said.

The prime minister vowed to hand aspiring buyers new long-term, fixed-rate mortgages with just 5% deposits, in the “biggest expansion of home ownership since the 1980s.” The right-to-buy policy in that decade helped many council tenants buy their own homes.

The Conservative leader said it was “disgraceful” that owner-occupation had plummeted, with renters forced to pay “through the nose” and unable to even carry out minor DIY.

The speech gave few details on what, how or when any reforms would take place, however, almost a year after the Conservatives first floated plans to encourage a new market in long-term, fixed-rate mortgages in their 2019 manifesto.

Many banks have withdrawn lower-deposit products since the pandemic hit, amid greater fears of bad loans and instead focused on support for existing customers.

Johnson also used the speech to underline the government’s “build back better” mantra.

He said major events like the coronavirus “don’t just come and go,” adding: “They are more often than not the trigger for an acceleration of social and economic change.”

Johnson argued the country not only could not, but should not seek “merely to restore normality.” Instead Britain had to tackle “chronic underlying problems,” including a deficit in skills, a lack of affordable homes, inadequate transport infrastructure and the fact too many people felt “left out.”

Britain’s economy had also suffered 12 years of “relative anaemia” despite recent record employment and rising exports, he added. The country must increase the trend rate of growth, incomes and its ability to deal with future crises by lifting overall productivity, he added.

The speech contained few new major announcements bar £160m ($206.8m) of funding for upgrading ports and infrastructure to boost the offshore wind industry, a measure briefed in advance.

The prime minister pledged the UK government would become the “world leader” in offshore clean power generation. “We believe that in 10 years’ time offshore wind will be powering every home in the country.”

A “green industrial revolution” will create “hundreds of thousands, if not millions, of jobs,” added Johnson.

A Downing Street spokesperson also told PA the measures would only create around 2,000 construction jobs in the short-term, and “enable the sector to support up to 60,000 jobs directly and indirectly by 2030.”

Johnson highlighted public investment in adult training, job protection efforts, transport infrastructure and the NHS, but stressed the importance of free enterprise. “There comes a moment where the state must stand back and let the private sector get on with it.”

The speech received a mixed reaction from business leaders, amid fresh warnings employers face a “cliff edge” as government support is cut back this winter, risking a fresh wave of job cuts.

Roger Barker, director of policy at the Institute of Directors, said firms would welcome investment in a greener economy, skills, and infrastructure

“But they are also acutely aware of the precarious state of the economy, with the impending end of the furlough scheme and the conclusion of the Brexit transition period,” he added.

Adam Marshall, director general of the British Chambers of Commerce, echoed the welcome for renewable energy investment. He said member firms in coastal areas wanted offshore wind farms ti “integrate local firms into supply chains,” creating local jobs critical for economic recovery from the pandemic.

He warned the economy remained on a “knife-edge” with more pressing challenges, however. “The prime minister must take similarly bold measures to support jobs and improve the Test and Trace system to shore up business confidence in the months ahead.” 

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