First-time buyers
The Labour party in the UK has proposed banning estate agents from selling new builds to anyone who has already owned a property before. The idea is to give priority to first-time buyers on new builds. While this proposal aims to support the aspiration of hardworking young Brits, some have criticized it as unworkable and unfair. However, the plans have faced questions as to how it would work in practice. Labour’s election boss Shabana Mahmood has been unable to explain how it would work in practice when asked by BBC’s Laura Kuenssberg. Mahmood replied that the proposal is to ensure that people can actually get on the housing ladder and to tilt the system in favour of those who cannot get a home. The proposal would require a change in the law and has raised questions like whether it would become illegal to sell an earmarked property to a non-first-time buyer, whether the first-timer has to commit to living there, and who will build them knowing that the market is very limited and therefore prices will be lower.
The proposal has good intentions of intervening in the property market, making it fairer and rebalancing it. However, government interventions have failed in the past, making difficult situations worse, and it is uncertain whether this proposal would be any different. Moreover, the current system is already balanced in favour of first-time buyers as they receive a large discount in Stamp Duty, which could be easily altered to give first-time buyers more advantage. The rate of new builds across the country continues to fall short of demand, and the system is not keeping up with the backlog of property building that has developed over decades. Population growth and the increase in household formations mean that more people are competing for relatively fewer properties to buy or rent, like some awful game of musical chairs.
The Tories branded the plans muddled and unworkable.
They hit back: “Labour are taking the latest political opportunity to shout from the sidelines on housebuilding – forgetting their record on building homes is abysmal and the hypocrisy of their own shadow levelling up secretary who called for housing targets to be scrapped in her own constituency.
“The Conservatives have built over two million homes since 2010, delivering the opportunity of homeownership to millions of young people.”
Frequently Asked Questions (FAQs):
Q. Why is the Labour party proposing to ban estate agents from selling new builds to anyone who has already owned a property before?
A. The idea is to give priority to first-time buyers on new builds.
Q. Is this proposal workable and fair?
A. The proposal has faced questions as to how it would work in practice. Some have criticized it as unworkable and unfair.
Q. What would be the impact of this proposal on the property market?
A. It’s uncertain whether this proposal would be any different from other government interventions that have failed in the past. Moreover, the current system is already balanced in favour of first-time buyers.
Q. What are the questions raised by this proposal?
A. The proposal raises questions like whether it would become illegal to sell an earmarked property to a non-first-time buyer, whether the first-timer has to commit to living there, and who will build them knowing that the market is very limited and therefore prices will be lower.
Q. What are the concerns with the rate of new builds across the country?
A. The rate of new builds across the country continues to fall short of demand, and the system is not
There are serious issues with this policy, as the intervention of the government in any free market activity, can have serious consequences.