A £400m government scheme is to be used to boost the building of new rental homes and get people onto the property ladder, David Cameron has announced.
Speaking at the Conservative Party conference last week, the Prime Minister said the new Rent to Buy scheme will allow housing associations and other providers to bid for a share of £400m in low-cost loans to build new homes from 2015 to 2018.
Landlords must then make the homes, which will mainly have one or two bedrooms, available to rent at below-market rates for at least seven years, with the idea of giving tenants breathing room to save for a deposit.
At the end of this period the tenant will have first refusal to buy the property, but will have to leave the property if they do not purchase it.
Communities secretary Eric Pickles said the scheme would “provide a springboard for young people to upgrade to homeownership down the line.”
John Cridland, director general of the Confederation of British Industry, said: “This action needs to go hand in hand with further long-term measures that boost supply and help for all those who want to get on the housing ladder, like new garden cities and streamlining the planning system.”
Adviser view
Simon Webster, managing director of Kent-based Facts and Figures Chartered Financial Planners, said: “Getting finance to buy a home has been constrained since the crash, so any opportunity for people to get onto the property ladder is to be welcomed.”
