Lib Dems’ rent-to-own scheme for young buyers

TENS of thousands of young families will be able to buy homes without putting down a deposit under a new “rent-toown” policy from the Liberal Democrats.

Tenants’ rent will be used to pay down the cost of the home, allowing the tenant to own the property after 30 years. Party officials said the plans – aimed at adults aged 25 to 34 – would see each monthly payment steadily buy them a new home, “just like with a normal mortgage”.

The idea cuts out the need for parents to raise a deposit worth tens of thousands of pounds to help their children get on the housing ladder.

The Lib Dems said that the scheme could see 30,000 homes, costing £300million a year, being funded this way by the end of the next parliament in 2022.

This proposal is part of its plans to deliver 300,000 homes a year by using public money to fill the gap between private sector building and demand.

Home ownership has plummeted for under-35s: 36 per cent of 25-34-yearolds now own their own home, down from 59 per cent 10 years ago.

Speaking on a visit to a school in Portsmouth, Tim Farron, the Lib Dem leader, said the “rent-to-own” initiative would be a “staircase” to buying a home.

He said: “It’s about making sure that people can get their foot on the housing ladder. We have got nine million people who are in the private rented sector in this country, and many of them have chosen to do that.

“This is about allowing people to get their foot on the ladder, to begin to pay rent and to lead that to staircase up to being able to own a property, part-own it, and give people that chance to become a homeowner should they wish.

“It seems to me that we have got to give young people, especially, the hope that homeowning, if it is something that they wanted, they can have it.”

Tenants will have the right to sell their property on the open market at any time, cashing out their share of the home to use as they wish – for a deposit or anything else.

Applicants will have to be in steady employment with the same kind of affordability tests and credit checks as for a conventional mortgage.

Providers will have to be regulated by the Financial Conduct Authority.