Chancellor’s new scheme to increase home ownership may see an end of the “Golden Renting” era.
The Help to Buy scheme, that is being introduced by the Government, may seriously affect the private rental market.
The Chancellor’s scheme will offer mortgages of 95% on properties worth up to £600,000 from January 2014. Throughout the market it is widely considered that the scheme will be mostly taken up by those who are at present renting in the private sector.
Brendan Cox, spokesperson of a leading Estate Agents in the south, said: “It will have an effect on the whole of the market, as people who couldn’t afford such a large deposit will now have the help they require. It means first-time buyers will be able to get to the market earlier and get out of rented accommodation.”
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Although the Help to Buy scheme is seen as damaging to the private rented sector, the Chancellor has also promised a significant increase on investment to the Build to Rent fund. The fund provides institutional investment in new homes built for the private rented sector. The original sum £200m which was made available in December’s Autumn Statement will be further increased to £1bn.
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Ian Fletcher, director of policy at the British Property Federation, said: “It’s encouraging the Government’s confidence in build to rent has been reciprocated and we are delighted to see that the equity funding was heavily oversubscribed.
“Working in partnership with Government, the sector should deliver an exciting and quality array of homes for renters.”
Within the Budget, the Chancellor has also made promises for consultations to be held on proposals allowing shops to change into homes, and agricultural use to change to residential.