Mortgages  

Lib Dems pledge ‘rent to own’ scheme

Lib Dems pledge ‘rent to own’ scheme

The Liberal Democrats have announced plans for young people to be able to buy their own home without needing a deposit.

As part of pre-election manifesto plans, the party stated that a ‘rent to own’ scheme would help first-time buyers onto the housing ladder by allowing them to build up a share in their home through renting.

The party argued that such a policy was crucial to stop the slide in home ownership over the last decade.

Article continues after advert

It is built on the work by social enterprise Gentoo Group, which rolled out a similar scheme in the north east which is set to expand into London later this year.

Rent to own will see first-time buyers steadily build up a share in their home through monthly payments equivalent to rent until they own the property outright after 30 years, just like a normal mortgage.

The Lib Dems suggested the government would partner with housing associations and other providers to deliver houses where monthly payments are no higher than market rent.

This forms part of wider plans to deliver 300,000 homes each year, with the government bridging the gap between private sector building and demand.

Nick Clegg, party leader and deputy prime minister, said for working young people, the dream of home ownership is increasingly out of reach.

He said: “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.

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

peter.walker@ft.com