Government launches new low cost rental property scheme
A £400m pioneering new programme called Rent to Buy has been unveiled for the UK, aimed at increasing numbers of new affordable rental homes which are available at better than market rates. This is the government’s rental sector equivalent of the Help to Buy scheme, which has boosted home building and meant 53,000 households could buy a home with a fraction of the standard deposit needed.
A £400m pioneering new programme called Rent to Buy has been unveiled for the UK, aimed at increasing numbers of new affordable rental homes which are available at better than market rates.
This is the government’s rental sector equivalent of the Help to Buy scheme, which has boosted home building and meant 53,000 households could buy a home with a fraction of the standard deposit needed.
The latest initiative, Rent to Buy, gives greater flexibility for those who are keen to rent affordably while saving for a deposit, and then either buy the property they’ve been living in, or a different home, at a later stage.
The terms of the deal allow housing associations and others to bid for a share of the £400m pot in the form of a low cost loan, and build up to 10,000 new properties UK-wide between 2015 and 2018.
These homes, which are mainly one or two bed apartments, must be made available to rent at below market levels for at least seven years.
Community secretary Eric Pickles says this should give renters time to save up their deposit so that they will then be a position to purchase their own property.
Once the fixed period is up, tenants have first refusal on buying the home, or one elsewhere. Alternatively, they may decide to to rent another property privately, or with the same housing association.
If the property is sold, the housing association could use any profits to help build more affordable homes. If not, they can rent out the place again, affordably, to another tenant.
With construction work due to begin next year, the scheme is part of a wider £23bn affordable homes drive for 2015 to 2018, and runs alongside Help to Buy and Right to Buy, which allows council tenants to purchase their properties.
The deal gives housing associations up to 16 years to pay back the low cost loans. Only once these are paid back can the properties be sold or rented out at a commercial rate.
Half of the funding will be made available in the capital, where housing association will bid for loans via the Greater London Authority.
Mayor Boris Johnson said: “Through this exciting new fund, we aim to provide thousands of new homes many years earlier than would otherwise be possible, and make them available to Londoners.”
If you’re selling your house, and looking for a quick house sale, schemes like Rent to Buy can make it harder to sell your house fast, because the competition is that little bit more intense.
At the same time, a quick house sale through traditional means can become snarled up and delayed with estate agents and solicitors dragging their heels.
We can help by selling your home quickly, and will guide you through the process of a speedy property sale. What’s more, we also have lots of advice and tips to offer about how to sell your house.
Get in touch with us today for an informal chat and to learn more.
Written by: The Team | On: October 2, 2014