The government has launched the Rent to Buy Fund in an effort to encourage the construction of new rental homes which tenants can buy at a later date. The Fund will provide low cost loans to home providers to build the homes, which must then be let at below-market rent for at least seven years to households who have never owned a home before. By saving on rent, tenants can then save for a deposit to buy their home. When a home is sold, the provider can use the proceeds to build more affordable homes in the area.
“It is a useful way of getting people on to the housing ladder” says Matt Ashley “as it keeps the subsidy within the social housing system when a property is sold, rather than it being lost as happens with traditional right to buy”. Bids will be assessed from 12 November 2014, so that construction can start in 2015.
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