Families who rent for 25 years will get the chance to buy their homes under radical plans to tackle the housing crisis
Tenants will not need to pay a deposit or get a mortgage for the house as they will build up equity over time
FAMILIES who rent their homes for 25 years will be given the chance to buy them outright under radical plans to tackle the housing crisis.
The "buy as you go" policy is reportedly being discussed ahead of the Chancellor’s Autumn Statement later this month.
It would mean tenants in the scheme would pay a surcharge to start building an equity stake in the property from the day they moved in.
They would not need to pay a deposit or get a mortgage for the house, and they would own it outright after 25 to 30 years.
They would also be able to end the arrangement by moving to a shared ownership scheme, selling the house on the open market and sharing the receipt with the Housing Association, or selling their stake back at a pre-agreed price.
Housing associations say that they could build 335,000 homes in just four years if the proposal was fully funded, helping to alleviate the crippling shortage of homes.
Senior government figures said they were considering the plan, put forward by the National Housing Federation, after Theresa May made housing a priority in her mission to do more for families who were “just managing”.
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In a change of direction from the approach taken by her predecessor David Cameron, the Prime Minister is believed to want to shift the focus from outright home ownership.
It comes as a report by Savills revealed a shortage of available homes to rent has already pushed up rental prices, with rises of 19% expected in the next five years – and 25% in London.
A YouGov poll last year found 52% of private renters earning the living wage or less wanted to own their own home but did not think that they would ever be able to do so.
Labour has also released new figures showing the drop in homeownership since 2010 has been worst for young people in the north of England, with 130,000 fewer between 2010 and 2015 – two-thirds of the decline in house buying across the country.
Shadow housing secretary John Healey said: “Six years of failure on housing under the Tories have meant a big drop in homeownership for young people right across the country, with the fall sharpest in the north of England.”
“This is no longer just a problem for London and the south-east, but a national problem that requires new national leadership.”