Rent-To-Own Scheme To Help First-Time Buyers

First (Other OTC: FSTC - news) -time buyers would be able to build up a share in their home through renting, under new Lib Dem manifesto plans.

The scheme, called Rent to Own, would help young people get on the housing ladder without having to pay a large deposit up front.

Under the plans, participants would steadily build up a share in their home through monthly payments equivalent to market rent until they own the property outright after 30 years.

The policy is likely to benefit first-time buyers on relatively high incomes, who may not have the parental support often necessary for a big deposit.

They would need to afford monthly payments equivalent to market rent - often more than a monthly mortgage payment.

Around a third of 25-34-year-olds currently own their own home, down from 59% in the last decade.

Deputy Prime Minister and Lib Dem leader Nick Clegg said: "For working young people the dream of home ownership is increasingly out of reach.

"Prices are so high renters cannot afford to save for a deposit, which means they can never take that first step onto the housing ladder.

"Young people deserve better.

"Rent to Own will mean, regardless of their background and family circumstance, they will be able to make this a dream a reality.

"This is about building a stronger economy and fairer society, and making sure Generation Rent has the same opportunity to get on in life as their parents and grandparents before them."

The scheme relies on housing associations building new properties specifically for the Rent to Own market.

The Lib Dems believe this would be viable as the associations would be able to charge higher levels of rent: at least 20% higher than 'affordable rent' and approximately 40% higher than 'social rent'.

Social enterprise group Gentoo have rolled out a similar scheme in the North East and plan to expand into London later this year.would help young people get on the housing ladder without having to pay a large deposit up front.

Under the plans, participants would steadily build up a share in their home through monthly payments equivalent to market rent until they own the property outright after 30 years.

The policy is likely to benefit first-time buyers on relatively high incomes, who may not have the parental support often necessary for a big deposit.

They would need to afford monthly payments equivalent to market rent - often more than a monthly mortgage payment.

Around a third of 25-34-year-olds currently own their own home, down from 59% in the last decade.

Deputy Prime Minister and Lib Dem leader Nick Clegg said: "For working young people the dream of home ownership is increasingly out of reach.

"Prices are so high renters cannot afford to save for a deposit, which means they can never take that first step onto the housing ladder.

"Young people deserve better.

"Rent to Own will mean, regardless of their background and family circumstance, they will be able to make this a dream a reality.

"This is about building a stronger economy and fairer society, and making sure Generation Rent has the same opportunity to get on in life as their parents and grandparents before them."

The scheme relies on housing associations building new properties specifically for the Rent to Own market.

The Lib Dems believe this would be viable as the associations would be able to charge higher levels of rent: at least 20% higher than 'affordable rent' and approximately 40% higher than 'social rent'.

Social enterprise group Gentoo have rolled out a similar scheme in the North East and plan to expand into London later this year.