Rent-to-buy is a new government scheme offering tenants subsidised rents to climb on the housing ladder that could threaten the buy to let market for landlords. The government is offering builders up to £400 million at low rates to construct up to 10,000 new homes by 2018, with half of the homes in London and the rest in major cities around the country.
Rents for the new homes will be restricted to 80% of local rents for a similar property for seven years. At the end of the discount term, tenants will have first refusal to buy the home at a discount price as part of the Help to Buy scheme already available to first-time buyers.
The government hopes the scheme will kick start home building and offer an alternative to young home buyers who cannot afford to save for a deposit.
“Through this exciting new fund we hope to provide thousands of brand new homes many years sooner than would otherwise be possible, and make them available to rent at below market rates for hard working Londoners,” said the capital’s mayor Boris Johnson.
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