Banks would be encouraged to fund 125,000 new homes for first-time buyers in England under a Labour government, Ed Miliband has said.
The scheme would be based on the first-time buyer ISAs announced by George Osborne which sees the government top up money people save towards a deposit to buy their first house.
Labour says it would invest the money in new housing developments.
The Conservatives said the scheme was “ill thought-through”.
Mr Miliband set out further details of his housing policy at a rally with party activists in Warrington.
In other general election campaign news:
- SNP leader Nicola Sturgeon has denied newspaper reports that she would prefer to see David Cameron as prime minister rather than Ed Miliband
- Culture Secretary Sajid Javid outlines Conservative plans to protect children from online hard-core pornography
- The Lib Dems have unveiled plans for a £2.5bn care fund to help keep people out of hospitals through improved GP access, a wider range of services in doctors’ surgeries and better healthcare in nursing homes
Housing is a key election issue, and the parties have made pledges to boost the supply of homes across the country and make home ownership more achievable.
The Conservatives have pledged 200,000 homes will be made available to first-time buyers in England by 2020 if they win the election. The Lib Dems have pledged to help first-time buyers get on the property ladder through a “rent-to-own homes” scheme.
But Mr Miliband attacked the government’s record on house building, which he said had fallen to its lowest level in almost 100 years and made it harder for people to own homes.
“A Labour government will get Britain building again,” he said.
Policy guide: Housing
This election issue includes house building, home ownership and social housing.
In his last Budget, Chancellor George Osborne unveiled the first-time buyers’ ISA which is designed to help people get a foot on the housing ladder.
It allows the government to top up by £50 every £200 a first-time buyer saves for a deposit.
Labour supports the policy but says further action is needed to address the “under supply” of homes.
Under its plan, any bank or building society that offered such an ISA would be required to invest the money in housing.
This would unlock £5bn to invest in a Future Homes Investment Fund to build 125,000 new homes between 2015 and 2020, according to Mr Miliband, and a Labour government would underwrite the investment.
The party has already committed to building 200,000 new homes every year by the end of the next Parliament but this scheme is aimed at getting the policy moving.
Developers would have to give priority to first-time buyers and anyone saving under the ISA scheme when the new homes are completed.
Chancellor George Osborne sounded a warning about Labour’s plan.
“The Help to Buy ISA will support over a million first-time buyers achieve their dream of earning their own home – and with one badly thought-through policy, Ed Miliband would put all that at risk. It would undermine home ownership and harm savers,” he said.
And Culture Secretary Sajid Javid told the BBC News Channel: “Remember when Labour were last in office, housing starts fell to their lowest levels since the 1920’s so they really don’t have a track record here.”
Stephen Williams, Liberal Democrat housing spokesman and communities minister, said: “Both Ed Miliband and Ed Balls admitted to failing on housing in government and no one should believe anything has changed now.
“The Liberal Democrats will build 300,000 homes a year needed to tackle the housing crisis while also helping people who want to get on the housing ladder now, through our Rent To Own scheme.”