Will A New Government Scheme Help Younger Buyers on to the Property Ladder?
A new scheme has been announced by the government, aimed at those who want to rent and save a deposit. It is hoped that this will enable more people on to the property ladder in the future. This news follows the launch of a study which found parents are becoming increasingly concerned that their children will be unable to buy a house in their local area.
Rent Before You Buy
The government is putting £400 million into this new project, which should make rents more affordable and give tenants a chance to save up a deposit to buy. Local groups and housing associations can put in bids to get access to some of the money through low-interest loans. They will then use this to build around 10,000 properties, alongside local facilities such as retail units or a lamppost shield, if required. Many of these will be starter homes with one or two bedrooms.
Once completed, the homes will be rented for at least seven years, with rent set at a below-average rate. This will provide tenants with some spare money which they can put into a savings account for a future deposit. When the agreement ends, they will have the first option to buy the house.
The aim of this scheme is to give more people the chance to save rather than having to spend all their money on rent. This is a situation that is worrying many parents, who don’t think their children will be able to afford a home without financial help from them.
Houses Too Expensive for the Young
Details of this new scheme come as a recent study found that more parents are worrying that their children are becoming priced out of their home town. The report from the National Housing Federation shows that over two-thirds of parents believe that they will need to put money into a future property for their children.
In London, 50% of parents think that the local area is now too expensive for their children, with the figure at 40% across the West Midlands and the South East. Even in the relatively more affordable north there are still concerns, with around 25% of parents within Yorkshire and the Humber and 20% across the North East worried about the cost of property.
The introduction of the new government scheme should go some way to alleviating this problem and encourage younger buyers on to the property ladder.