Ascheme to encourage house building for lower income households was announced recently by Eric Pickles, the communities secretar y.
Housing associations and social landlords will be given £400million wor th of cheap loans to build homes under a Rent to Buy scheme, whereby they will have to rent the houses at below-market rates – capped at 80 per cent of local market value – for seven years. At the end of this period, people will be given the oppor tunity to buy the homes.The government claims that 10,000 new homes will be built between 2015 and 2017.
The policy is aimed at young people tr ying to build up a deposit to get on the housing ladder rather than those on benefits.
Eric Pickles pointed out that current schemes, including the Help to Buy scheme, have boosted house building. At the star t of September, 48,393 homes had been bought through the Help to Buy equity loan scheme, with 82 per sales of house sales going to first-time buyers.
“Both house building and the number of first-time buyers are now at their highest rate since 2007,” he said.
“As par t of our wider housing programme, this new scheme will help increase the provision of low-cost rented accommodation and provide a springboard for young people to upgrade to home ownership.”
To qualify, the household income must be less than £66,000 a year – or £64,300 if looking at homes in London – based on two people earning £33,000 each. Housing associations will have up to 16 years to pay back the low-cost loans and, until the loans are repaid, the homes must be made available for affordable rent.
As with many schemes, the availability and the terms can var y between housing associations – as can the names, such as Tr y Before You Buy, Rent Save Buy, Rent to Save – and the details need to be checked accordingly.
Should you consider signing up – and eventually buying the proper ty – it is always wor th checking with an independent mor tgage adviser first and price up how much this would cost in monthly repayments. You should also ask whether they are happy to lend against proper ties within the Rent to Buy schemes and to factor in the costs of buying a home too.
some of the new kit