Rent to Buy is helping young people onto the housing ladder
Under a new scheme that is designed to help thousands of young people get onto the housing ladder, announced by Eric Pickles at the weekend, housing associations will have access to £400million worth of cheap loans to build new homes.
The new scheme is a rent to buy and housing associations and landlords will have to rent the new houses out at below market rates which will be capped at 80 per cent of local market value, for a period of seven years. When the time is up people will be given the opportunity to buy the homes.
The government is hoping that 10,000 new homes will be built under this scheme during 2015 and 2017 and it is squarely aimed at young people trying to save up a deposit and not those on benefits.
To qualify for this scheme the household income has to be less than £66,000 a year and that is based upon two people earning £33,000 each. Under the scheme, the housing associations will have a period of up to 16 years to pay the low-cost loans back and until the loans are repaid, the homes must be made available for affordable rent.
This is one of a number of initiatives to kick start the construction industry for example 48,393 homes had been bought through the Help to Buy equity loan scheme, with 82pc of house sales going to first-time buyers.