New Rent to Buy scheme to help young people
Up to 10,000 new homes will be built between 2015 and 2018 as part of the government’s new Rent to Buy scheme. Housing associations will be able to apply for low-cost loans from a fund of £400m to finance the projects.
They will then have 16 years to repay the loans, and during this time, the homes must be made available for rent at less than the market rate. Even if the loan is repaid before that time, the homes must be rented at a low rate for at least seven years.
The government hopes this will give young people the chance to save money for a deposit to ultimately buy their own home. The tenants will have first refusal to buy the property once they have lived there for seven years.
Communities Secretary Eric Pickles said: “This government is standing by people who work hard and do the right thing, and helping them move on and up in life.
“Both house building and the number of first time buyers are now at their highest rate since 2007. But there is more to do. As part of our wider housing programme, this new scheme will help increase the provision of low-cost rented accommodation and provide a springboard for young people to upgrade to home ownership down the line.”
Rent to Buy is the latest government initiative to bolster the UK housing market. It follows the Help to Buy scheme in which the government provided loans or guarantees for mortgages, and Right to Buy which helped people living in council houses buy their home at a discounted price.
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