The Liberal Democrats have announced plans that will see people buying houses without the need for a mortgage.
Under the “rent-to-own” proposal, homebuyers would buy chunks of equity in a house through monthly payments and would not need to put up a deposit.
The policy would mean homeowners could gradually build up a share in their house until they owned it outright after 30 years.
It forms part of wider Lib-Dem plans to build 300,000 homes a year, with 30,000 rent-to-own properties
Nick Clegg, the party’s leader and deputy Prime Minister, 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 dream a reality.”
Figures from the Council of Mortgage Lenders showed the average first-time buyer in London put down a deposit of 24 per cent while the UK average was 17 per cent.
Adviser view
Calvin Oram, a mortgage broker with Solihull-based Oak Tree Mortgages, said: “It will help people get onto the property ladder without a deposit, but everything seems to be geared towards new-build houses.
“A lot of these things seem to be geared around the building company rather than the purchaser.”
