Government Plan - "Rent Now Buy Later"

Housing minister Caroline Flint announced today a series of measures to support the housing market in an attempt to keep government housebuilding targets on track.

The Paper, “Facing the Housing Challenge - Action Today, Innovation for Tomorrow”, outlines measures which include a scheme to help first-time buyers into homeownership and the creation of the first four PPP local housing companies.

The Rent to Homebuy scheme to help first-time buyers will allow eligible households earning below £60,000 a year to rent a new home at 80% of market rent or less for two to three years, then offer the option for part-ownership of the home.

The government also announced that the £200m of funding already allocated to buy unsold stock from housebuilders to use as affordable housing could be topped up if enough suitable properties become available. Although using the Department of Communities and Local Government's own house price figures, £200m would buy 916 average priced homes.

The Housing Corporation is already in discussion with major housebuilders about the scheme.In addition, up to 75,000 further new homes may be built in areas of high housing demand designated as “New Growth Points”, with £100m to be invested for supporting infrastructure such as schools and hospitals.

Developments built by the partnerships will be jointly agreed but must include at least 50% affordable housing. The first four local housing companies will be in Barking and Dagenham, Newcastle, Nottingham and Manchester.

Commenting today Flint said: “The package being announced today will both help people facing difficulties right now, and lay the foundations to help meet the long-term housing needs of the country...We are determined to continue to do everything possible to promote long-term stability and fairness in the housing market… the long-term need to provide more homes has not gone away. We have a growing and ageing population and will only see worsening affordability unless we increase housing supply.”