Families who are in rented accommodation could be allowed to buy their homes with a deposit or a mortgage under a new ‘buy as you go’ scheme. The plans from the National Housing Federation are being considered by senior government officials.
The Prime Minster Theresa May said housing was a priority as part of her mission to do more for families who were “just managing” – and a consultation document is likely in the next few weeks. It has been suggested that she wants to shift focus from outright home ownership – a goal of George Osborne and David Cameron, while they were in office.
The proposals would allow tenants to start building an equity stake in the property they rented from the day they moved in. They would own the property outright after 25 or 30 years. Currently, Housing Association tenants will pay between 60 and 80 per cent of the market rent. Those participating in a ‘buy as you go’ scheme would be asked to pay a 10 per cent surcharge that would become their equity stake, if the plans were to go ahead. If the family wanted to end the arrangement, they would be able to buy the property outright, move to a shared ownership scheme, sell the property on the open market (sharing the receipt of funds with the Housing Association), or sell their stake back to the Association at an agreed price.
The additional revenue would allow Housing associations to build 335,000 much needed homes over a four year period.
The Federation believes that some 1.4 million people who are unable to access either social housing or home ownership could benefit. According to Inside Housing, the scheme will be for new build housing and new tenants.
According to the Guardian, the plans could be revealed by the Chancellor Phillip Hammond in his Autumn statement, due Wednesday, November 23th at around 12:30pm.