Labour Party manifesto pledges use of first-time buyer ISAs to fund 125,000 new homes

Help to Buy ISAs for first-time buyers were announced by the coalition government in the 2015 Budget. The ISAs will allow first-time buyers to save up to £200 a month towards a deposit for a home, to which the government will add 25%.

In a speech in Warrington this month, Labour Party leader Ed Miliband said that, under a Labour government, the money raised by Help to Buy ISAs would be channelled into a new Future Homes Fund and used to invest in house building. Miliband estimated that the policy would provide £5 billion, which he said could be invested in 125,000 new homes.

The policy was included in the Labour Party's general election manifesto (86-page / 1.2 MB PDF), launched on Monday. The manifesto restated previous Labour Party commitments to build at least 200,000 homes a year by 2020; to introduce a "use it or lose it" policy to "encourage developers to build" on land they hold; and "to build a new generation of garden cities".

Also included in the document were commitments to "build more affordable homes by prioritising capital investment for housing"; to "increase competition by backing small builders … and by getting the public sector building again"; and to allow councils to require that new homes in areas of housing growth are offered to first-time buyers.

Planning expert Iain Gilbey of Pinsent Masons, the law firm behind Out-Law.com, said: "Housing is front and centre in both of the main parties' manifestos this year, highlighting their desire to win votes from the undecided 'middle ground'. However, the contrast between the two main parties is marked – with Labour offering more direct procurement of housing and the diversion of money raised through the Help to Buy ISA into its Future Homes Fund, and the Conservatives returning to the days of "right to buy", with housing association tenants being offered the opportunity to buy their homes at a discount."