Liberal Democrats announce 'Help to Rent' scheme to get young people on the 'rented property ladder'
The Liberal Democrats have announced plans to provide government loans for tenancy deposits to help young people rent their first home.
The “Help to Rent” scheme would allow people aged 18 to 30 to borrow up to £1,500 (£2,000 in London) to use as a deposit on rented accommodation, with repayments lasting 12 or 24 months.
The party believe the scheme would help young people who are struggling to save rental deposits, which on average cost £1,200.
Leader Nick Clegg said: "You’ve got this generation that is sometimes called ‘the clipped wing generation’, or ‘the boomerang generation’, of an increasingly large numbers of youngsters – I think the estimates are now about 2m people in their 20s and 30s – who simply can’t find the money needed for a deposit to rent a flat or home of their own. They simply can’t find the up front costs to move into rented accommodation, so move back or stay with their own parents. That’s obviously unfair on them, because it means they’re just not getting their feet on the rung of the rented property ladder.”
To be eligible, tenants would need to be aged 18 to 30, in paid employment and not be homeowners. The interest rate would be pegged to the cost of government borrowing (currently approximately 2.5%).
Housing is among the key election topics
Housing policy has been high on the lists of all three major parties so far in their election campaigns. Labour has pledged to introduce three-year tenancy agreements with strict rules to make it more difficult to evict tenants, while the Conservatives announced a Help To Buy ISA in March.
The Liberal Democrats have been busy too, with the new proposals following up ther previously announced plans to build 300,000 new homes a year and set up a “rent to own” scheme to help first-time buyers get on the property ladder.
A practical policy
Matt Hutchinson, director of flat and house share site SpareRoom.co.uk, welcomed the proposals. He said: "This is a great example of a housing policy driven by what real people need. It takes a similar scheme, already in place in the capital, where deposit loans are offered by employers and paid back monthly through salary deductions, and makes it available to all renters, regardless of where they live.
"Getting a deposit together is tough and, all too often, renters wanting to move house need to find a new deposit before they get their old one back. The ability to borrow from the government will really help those starting their housing journey but also young renters who need to move, helping our workforce stay flexible. All too often policy is aimed at helping a few people deal with the huge affordability gap, rather than providing practical solutions. We must address affordability in the long term but sensible, practical policies to help in the meantime are also vital.”