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The UK government today announced a raft of
initiatives aimed at unfreezing the housing market, including plans for a
‘rent first, buy later’ home purchase scheme for households earning
under £60,000.
Under the pilot scheme, eligible buyers will to
able to rent a new home at a discounted rate – no more than 80% of the
market rent value – for a period of up to two to three years.
During that time the government hopes the tenants
will be able to save the necessary deposit needed to purchase a share of
25% or more in that home, an offer which will be open at any time.
According to a recent surveyors’ report, first
time buyers now require an average deposit of more than £27,000 to buy
their first home. Meanwhile, lenders yesterday warned the government that
mortgage deals would continue to get more expensive unless the Bank of
England worked to get financial markets moving again.
Housing minister Caroline Flint said the ‘Rent
to Home buy’ pilot scheme was designed to ‘give more choice and
flexibility to first time buyers’.
Other initiatives announced today include:
- Four new ‘local housing companies’ in
Barking and Dagenham, Newcastle, Nottingham, and Manchester, that will
allow councils to put forward their surplus land for joint public/
private developments that must include at least 50 per cent affordable
homes.
- Plans to build up to 75,000 homes in 20 towns
and cities across England, with £100 million provided for schools,
hospitals and other infrastructure facilities.
- Potential extra funding on top of the £200
million already allocated to councils to buy unsold stock from house
builders for affordable homes.
However, a spokesman for the Royal Institute for
Chartered Surveyors warned the scheme would have little impact on
households with lower quartile incomes, and urged the government to expand
the scheme to include all first time buyers.
‘It is time for the Government to take bold
action to tackle the problems in the housing market and innovative
solutions must be put in place now to help people who want to buy a home
but cannot get a mortgage, ’ he said.
Flint said: 'The package being announced today
will both help people facing difficulties right now, and lay the
foundations to help meet the long term housing needs of the country. That
means being ambitious, but also practical and realistic, acknowledging not
only the difficulties faced by individuals and families, but for those who
work in the house building industry.'
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