The ‘rent now, buy later’ scheme
by: david field |
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The government has recently launched a ‘rent now, buy later’ scheme with the intention of breathing new life into the UK housing market. It is not going to hit the whole of the country at first, and will only be targeting households where income is less than £60,000. The scheme, called Rent to Home Buy, gives home-owners the chance to rent a property at a discount rate, roughly 80%, and then the opportunity to purchase 25% of the house at any time under the rental period.
The government has already come under criticism for its target of three million new homes to be built by 2020, and with house builders cutting back due to the current climate, this estimate seems quite unrealistic. The influx of inner-city apartments and town-houses has made buying a new house difficult, as prices rise and has not solved the problem that is the need for more homes.
Recent years has seen a rise in the “sell and rent back” market, whereby companies offer a percentage of the market value of your house and then allow you to sell and rent back your home, meaning you don’t have to go through the hassle of moving house and dealing with estate agents. People are seeing this as an easy way out of their mortgage worries, especially considering the current economic climate and falling house prices meaning that it is getting more and more difficult to sell through an estate agent.
The future for the UK housing market looks very uncertain, with growth having decreased over the past 12 months and negative growth reported for February and March of this year. A record number of people were refused mortgages during June and with the US mortgage crisis seemingly relentless (it was this that had a knock-on effect on the UK economy), home-owners may be looking for more ways to sell-up before the situation gets worse and the value of their house decreases even more.
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About the Author
The author of this article recommends Swift Capital for if you want to to sell and rent back your home or if you are a landlord, they offer legal advice for those who are selling with a sitting tenant.
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