This revolutionary scheme is a fundamental shift in housing policy and will give young people caught in ‘generation rent’ a chance at home ownership.
It means working young people who are unable to afford a deposit will, rather than be trapped in rental accommodation forever, be able to own their own home.
First-time buyers will steadily build up a share in their home through monthly payments equivalent to rent until they own the property outright after 30 years, just like a normal mortgage.
Under Liberal Democrat plans the Government would partner with housing associations and other providers to deliver ‘Rent to Own’ houses where monthly payments are no higher than market rent.
The policy forms part of Liberal Democrat plans to deliver 300,000 homes-a-year, with the government bridging the gap between private sector building and demand.
It also builds on ground-breaking work by social enterprise Gentoo Group, who have rolled out a similar scheme – called Genie – in the North East and plan to expand into London later this year.
Lewes Lib Dem MP Norman Baker said: “For working young people in our area the dream of homeownership is increasingly out of reach.
“Prices are so high renters cannot afford to save for a deposit, which means they can never take that first step onto the housing ladder.
“Young people deserve better. Rent to Own will mean, regardless of their background and family circumstance, they will be able to make this a dream a reality.
“This is about building a stronger economy and fairer society, and making sure Generation Rent has the same opportunity to get on in life as their parents and grandparents before them.”
Peter Walls, Chief Executive of Gentoo Group, said: “I am delighted the Liberal Democrats have recognised our innovation and are aiming to make this scheme scalable across the UK.
“A now proven concept, Genie has already unlocked homeownership for many that were excluded.
“At Gentoo, we aim to address societal challenges and developed Genie to let more people access homeownership in a fair and equitable way.
“We are looking forward to Genie launching in London later this year.”