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.
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 speech gave few details on how the measures would work, however. Many banks have withdrawn lower-deposit products since the pandemic hit, amid greater fears of bad loans and instead focused on support for existing customers.
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.
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.”
Johnson’s emphasis on job creation from the measures come amid mounting pressure on the government over the scale of mass job losses across the UK economy.
Official figures show employers have axed at least 695,000 employee jobs since March when Britain went into lockdown, and millions of other workers have seen hours cut or freelance work dry up.
Business groups warned the government on Tuesday morning that employers face a “cliff edge” as government support is cut back this winter, risking a fresh wave of job cuts.
Three leading business figures sounded the alarm over the end of the furlough scheme, with fears employers will still not be able to prevent lay-offs despite new measures.
Chancellor Rishi Sunak has resisted pressure to extend the job protection scheme, which saw millions of staff furloughed across the economy when the coronavirus and lockdown first hit.
Last month he instead announced a new wage subsidy scheme to replace it from November, on top of a ‘job retention bonus’ for firms keeping furloughed staff.
But employers’ contributions will be significantly higher under the new initiative, with organisations expected to pay more than half workers’ typical wages for only a third of their hours.
Rain Newton-Smith, chief economist of the Confederation of British Industry (CBI), told a parliamentary hearing the leading business group was concerned there was a “bit of cliff edge” looming after firms received the bonus.
“A lot of businesses are going to have to make a lot of difficult decisions,” Tej Parikh, chief economist at the Institute of Directors (IoD), also told MPs on the Treasury select committee.