Liberal Democrats unveil housing proposals

9.44.00am GMT Fri 20th Feb 2009

housing queues are growing as the recession deepens

The Liberal Democrats have unveiled plans to boost the number of low cost homes and reduce repossessions. Government efforts to do so have had little effect and suspending stamp duty on homes worth below £175,000 was a "waste of money". More empty properties need to be used and firms with empty commercial properties should get incentives to let them out as temporary homes.

Ministers have announced measures to help people avoid repossession but only a small portion of those at risk of repossession will be covered by such schemes and there should be new rules forcing courts to make repossession a last resort.

The Liberal Democrats proposals would cost £400m over two years and would be paid for by scrapping Homebuy Direct, a scheme set up by the government to help first-time buyers on to the housing ladder.

"There is a danger that we will see thousands of people kicked out of their homes" - Vince Cable

The Liberal Democrats also propose to introduce "safe start" mortgages, which would offer first time buyers 85% of the value of buying a property at a fixed rate for the first five years. The party's Treasury spokesman Vince Cable said: "With only a small portion of the 75,000 houses that are predicted to be repossessed in 2009 covered by the government's scheme, there is a real danger that we will see thousands of people kicked out of their homes over the next 12 months. It is critical not only for those who may lose their homes but also for the wider economy, that we have a comprehensive plan to ensure that repossession is only ever a last resort. In the future, people must have access to low risk, simple mortgages which ensure that people who have sensible deposits are protected from negative equity."