Ahead of the Conservative Party Conference, Eric Pickles proposes a solution that will help first time buyers and help weary parents realise their ambition of becoming empty nesters!
Eric Pickles will launch a new ‘rent to buy’ programme that will create a pool of one and two bedroom properties that will be rented out via housing associations at ‘below market rent’. The scheme will be available for ‘hard working young professionals’ who have never owned property and earn less that £33,000 individually or less than £66,000 as a couple. They will be able to rent a new property for up to seven years and then have the opportunity to buy it.
The proposals allow for an investment of £400 million to provide 10,000 new homes. It might only make a small dent in the housing supply, but it has to be good for the construction and housing sectors and if successful, will be implemented between 2015 and 2017 – so if your son or daughter has just gone off to university, you can think about converting their bedroom into the study or games room you always wanted!
Details regarding the discount on the rent and possibly the purchase price are yet to be confirmed. However, it is a possible solution for those people who will take advantage of the reduced rent by saving their spare income to build up their own deposit during those seven years.
It may seem a long time, especially to a young person, but it looks like a positive solution especially when current research shows that it will normally take twenty years or more for a first time buyer to save a deposit and this is where Mr Pickles’ plan will put a smile on the faces of parents up and down the land.
At Mantle Financial Planning our mortgage department is always on the look out for innovative solutions to help first time buyers and this will have a positive knock on effect for the rest of the private property sector.
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