Lib Dems in 'rent-to-own' homes election pledge
03-15-2015
Nick Clegg: "We must stop house prices spiralling out of the reach of young people"
The Lib Dems are promising to help first-time buyers get on the property ladder through a "rent-to-own homes" scheme, if they are in power in May.
Under the plan, young people in England would make monthly payments equivalent to rent to build up a share in their home, without requiring a deposit.
After 30 years, occupants would gain full ownership of the property.
The announcement comes as the Lib Dems prepare to meet for a final time before the general election.
The party will gather for their spring conference in Liverpool on Friday, with leader Nick Clegg due to address activists on Sunday.
Housing is a key election issue, and the parties have made pledges to boost the supply of homes across the country and make home ownership more achievable.
There is now ferocious competition for the votes of frustrated would-be first-time buyers, who will be able to choose between a series of competing schemes from politicians come the election.
The Liberal Democrats have unveiled a policy that they claim would be revolutionary: to aim to make 30,000 new homes a year in England available to tenants who would slowly acquire equity as they made monthly rental payments, until after 30 years they owned the property outright.
The party is as yet undecided as to how the government would help social enterprises and housing associations build homes on this basis, and has not said how much it would cost the taxpayer.
The Conservatives intend to expand a coalition scheme to provide 200,000 discounted starter homes for those buying for the first time; Labour say first-time buyers would get priority under their plans.
The Conservatives have promised to build 200,000 starter homes for first-time buyers in England under the age of 40, priced at 20% below the market rate.
Meanwhile, Labour wants to see 200,000 new homes built a year by 2020, including new towns and garden cities.
Tom Brake says the Lib Dem rent-to-own homes plan would make a "very substantial dent in what is a huge problem"
Announcing the Lib Dem housing policy, Mr Clegg said it would make home-ownership "a reality" for thousands of young people currently priced out of the market.
The party is aiming to deliver 30,000 rent-to-own homes by 2020 in partnership with housing associations and other organisations, if they remain in government after the general election.
Under the plan, occupants would have an option to cash-in their share at any time, which could potentially to be used as a deposit for a home on the open market.
"For working young people the dream of home ownership is increasingly out of reach," Mr Clegg said.
Summary of other parties' housing policies:
- Labour wants to see 200,000 new homes built a year by 2020. It would give local authorities new borrowing powers to fund projects and could allow councils to penalise firms "hoarding" land if developments do not begin within a fixed period.
- want to see 200,000 new starter homes for first-time buyers built by 2020. They would also extend the Help to Buy scheme in England until 2020 and make it easier for council house tenants to buy their homes.
- UKIP says brownfield developments should be prioritised, with reduced VAT and new homes exempt from stamp duty when they are first sold.
- The Green Party wants to build 500,000 new social homes for rent by scrapping buy-to-let mortgage interest tax allowance. Its leader Natalie Bennett was criticised after struggling in an interview to explain how much it would cost and how it would be paid for.
"Young people deserve better. Rent-to-own will mean, regardless of their background and family circumstance, they will be able to make this dream a reality."
Mr Clegg told the Evening Standard that the idea would be among his party's "core" offers in its election manifesto, suggesting it had been held back to date by "small c and big c conservatism in Whitehall".
'Proven concept'Social enterprise business Gentoo Group said the idea was modelled on a 2011 initiative it had successfully piloted in the north-east of England.
Peter Walls, the firm's chief executive, said rent-to-own was "a now-proven concept" which "has already unlocked homeownership for many that were excluded".
Ahead of the Lib Dem conference, the deputy prime minister has warned the party that it faces a "long, hard campaign" in the run-up to the 7 May poll.
In a foreword to the conference agenda, he said the meeting was a chance to "set out our vision for the country" but also "celebrate our achievements in coalition".
The conference will get underway on Friday with a rally addressed by general election co-ordinator and former leader Lord Ashdown.
It comes after the party's former head of fundraising, Ibrahim Taguri, had to step down as a party candidate after a newspaper claimed he had accepted a "potentially illegal donation", although Mr Taguri denies any wrongdoing.