Rent to Own Scheme
The LibDems have announced a new Rent to Own scheme before the coming General Election. This is to be implemented between 2015 and the next election in 2020.
It is for first time buyers, especially those who cannot put together the deposit for their first home.
They have designed the new Rent To Own scheme to help new buyers to build up a stake in their homes via renting.
First Time Buyers
Getting started in the market is a huge problem for first time buyers. The typical first time buyer in London will need a deposit of over £60,000 if they wan to buy their first home.
They would pay what they would pay in rent, at a market rate, for 30 years. After that they would own their own home.
There would be something at the end of it for them – ownership of their own home.
Dream of Home Ownership
According to Nick Clegg, the LibDem leader:-
“For working young people the dream of home ownership is increasingly out of reach. Prices are so high renters cannot afford to save for a deposit, which means they can never take that first step onto the housing ladder.
“Rent to Own will mean, regardless of their background and family circumstance, they will be able to make this a dream a reality. This is about building a stronger economy and fairer society, and making sure Generation Rent has the same opportunity to get on in life as their parents and grandparents before them.”
Higher Monthly Payments
It is expected that the monthly payments for Rent To Own will be higher than if they took out a mortgage on the property.
It is being suggested that, in London anyway, it will mainly benefit those on higher incomes.
The Housing associations would build the new houses for the Rent to Own scheme.
The LibDems plan to have 30,000 homes in the Rent to Own scheme by 2020.
While they will be paying more than mortgage holders for their properties there will still be people who benefit out there.
There are millions of people who have been paying rent on their houses for years out there. The very cost of the rent prevents them from being able to save up for a mortgage deposit.
They might as well have been paying that rent towards being able to own the house after 30 years.