15 October 2008 Media Statement

Labour offers HOPE while Nats offer false hope

Labour's new HOPE initiative differs fundamentally from National's Gateway programme in one critical aspect and that is that HOPE will actually make homes affordable for modest income earners, says Housing Minister Maryan Street.

"National's housing spokesman Phil Heatley claimed today that the two initiatives were similar, but he couldn't be more wrong," she said.

"Under the HOPE programme a two to three bedroom starter home could be built for around $165,000, which a household earning from $44,000 could afford. This is made possible by the Crown retaining ownership of the land.

"Under National's plans the household would have to buy the land after 10 years. In essence this means the family would still have to pay the full cost of owning the property - even if some of the payments were initially deferred.

"Most households take much longer than 10 years to pay off a mortgage. Under National's policy, many modest income earners would still be paying off the cost of building the house, when they would suddenly be faced with stumping up a second mortgage to pay for the land or they would be kicked out of their homes.

"The Gateway programme effectively defeats the whole purpose of creating affordable homes for modest income earners and shows New Zealanders can’t trust National to deliver real assistance for new or aspiring homeowners

"The whole point of creating an affordable housing initiative like HOPE is to reduce the cost of home ownership. National will charge people the full price in the long run and when those who need support to get into home ownership map out their finances long-term they will realise a Gateway house is as unaffordable as any other.

"It's also worth noting that National appears set to charge people the cost of leasing the land for the first 10 years - although this remains fudged in its policy statements. National has also given no detail about how many homes the Gateway programme will provide.

The HOPE programme keeps the land in Crown ownership, so that when the house is sold another family can benefit from an affordable home on that land. In that way a permanent supply of affordable homes is built up and future generations of modest income, prospective home owners can also be helped.

HOPE builds on our other initiatives around housing affordability including Welcome Home Loans, Kiwisaver and Shared Equity. Phil Heatley cannot ride on our polices and claim they are his own. Any examination would show that Labour polices hold the greatest enduring hope for first home buyers.

The Gateway "initiative" is rather similar to National's promise to allow state house tenants to buy their homes, when it knows very few tenants could actually afford them. Gateway is just another smoke and mirrors, false hope policy that delivers very little at all.

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