In a bid to outflank the Tories and Labour on their housing policies, the Lib Dems have proposed a Help-to-Rent scheme they say will assist young people aged 18 to 30 move from their family home into rented accommodation.
The scheme offers people in this age bracket up to £1,500 as a loan from government to use as a deposit on a rental property, whilst those renters in the capital would be extended up to £2,000.
Qualifying tenants would have to be in paid employment and be in a position to pay off the loan in either a 12 or 24 month period.
The Lib Dems claim this would be good for both young tenants and buy-to-let landlords alike.
Announcing the scheme, Deputy Prime Minister Nick Clegg said:
“You’ve got this generation that is sometimes called ‘the clipped wing generation’, or ‘the boomerang generation’, of an increasingly large numbers of youngsters who simply can’t find the money needed for a deposit to rent a flat or home of their own“
The Deputy Prime Minister thinks the Help-to-Rent scheme would significantly remove the financial barriers affecting this age group from securing their own rented accommodation and insisted that young people being stuck in a family home is having a negative effect on the property market.
Rents in the private rented sector (PRS) have been increasing pushing up the amount of required deposits. The cost of paying back the loan, the Lib Dems say, will depend on the cost of government borrowing, which is currently around 2.5 per cent.
Opponents of the proposed scheme have responded with the criticism that it will simply push Britain’s youth, many already struggling with high debt from student loans, into even more debt.
There other two parties have now announced their own plans to tackle the problems facing people with housing needs.
The Conservatives say they plan to build 275,000 new homes over the next five years, they have announced an extension of their Help-to-Buy scheme, to introduce a Help-to-Buy ISA, and make it easier for housing association tenants to buy their own homes.
Labour promises to build 200,000 new homes every year, to bring in a controversial mansion tax which they say will help fund the NHS, to cap buy-to-let rents and to introduce a three-year tenancy.
In addition to their Help-to-Rent scheme proposal, the Liberal Democrats want a new Rent-to-Own scheme aimed at getting more first time buyers onto the property ladder, and they say they want to build 300,000 new homes every year.
— LandlordZONE (@LandlordZONE) April 14, 2015