The Conservatives have pledged to hand young people a £5,000 tax rebate towards their first home.
The vow came from shadow chancellor Sir Mel Stride, who said his party’s ‘first-job bonus’ would go to people in full-time work, with their national insurance payments diverted into a long-term savings account.
Tories said the move could be worth £10,000 for a working couple, with 600,000 people a year potentially benefiting at a cost of £2.8bn.
“I want to send an unequivocal message to those young people staring out in life,” said Stride (pictured) in a speech at the Conservative Party conference in Manchester this morning.
“If you work hard and do the right thing – the Conservative Party is on your side.”
He said the cash to fund the plans would come from £47bn of savings it would make over five years, should it become the next government.
This would come from a range of areas that include cutting the welfare bill, the civil service, the overseas aid budget and ending the use of hotels to house asylum seekers.
John Charcol mortgage technical manager Nicholas Mendes said a £5,000 rebate for first-time buyers would be “welcome” but “not transformative”.
Mendes argued: “In most regions it would comfortably cover conveyancing, valuation and moving costs, with a little left for the deposit.
“In London and much of the South East, where deposits are many multiples of that figure, it is unlikely to change behaviour in a meaningful way.”
He added: “Lenders will also need clarity on whether the rebate counts towards the cash deposit, whether it can be combined with a Lifetime ISA, and how it is treated if someone changes jobs or has breaks in employment.”
Hargreaves Lansdown head of personal finance Sarah Coles said if the move is intended to replace LISAs, “it would raise real questions”.
Coles points asked: “Would people be able to continue paying in and receiving additional bonuses from the government along the way.
“The LISA has the potential to pay tens of thousands of pounds in bonuses, and losing this would be a real blow.
“Would people continue to be able to both save and invest? If the Lifetime ISA fell by the wayside with the launch of this scheme, it could mean reducing the options available for property deposits to grow.
“It could punish those who expected to put away smaller sums over longer periods – including those on lower incomes.”
The Conservative announcement came as the government announced plans to speed up homebuying by one month and cut costs by over £700 through a range of measures.
These include better upfront property information, earlier binding contracts, and greater use of digital information.
