Government home rescue package: Rent first, buy later

The UK government met yesterday to try and come up with a rescue plan for Britain’s ailing housing market. The rescue package includes a first-time buyers’ “rent first, buy later” scheme along with a new plan that will let councils work with local housing firms to develop surplus land for homes.

UK Housing Minister, Caroline Flint, has said that these proposals were an attempt to help improve the current housing market conditions, we have already seen the removal of the 100% mortgage from the market, making it harder for first-time buyers to get on to the ladder.

According to reports from The Guardian, the government’s new proposal of rent now, buy later will allow households with earning less than £60,000 to rent a property at a lower rate, maybe 80% or less for two to three years, they will then get the option to purchase that property later. This is ideal for those who wish to save for a deposit.

The government need to be able to offer more homes, to do this they will need to help the house building industry, if they want to be able to increase housing supply. The government wants to reach a target of three million new homes by 2020.

To achieve this councils and the private sector will have to work together to help provide homes on land that has been earmarked as surplus. There is to be a pilot scheme, four areas will be doing this, Barking and Dagenham council, and Newcastle, Nottingham and Manchester councils, those councils who are taking part will share a fund of £510 million.