Government's 'rent now buy later' scheme criticised

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Government's 'rent now buy later' scheme criticised

Thu 17th Jul 2008

A government plan to allow households to rent property at a discounted rate with the option to buy part of it has been criticised as not providing a "long-term cure" for the housing market.

The 'rent now buy later' scheme, open to some English households with earnings of under £60,000, enables them to rent at 80 per cent or less of the going rate for two or three years to save up for a deposit.

But the Intermediary Mortgage Lenders Association (IMLA) said the move is a "sticking plaster, not a long-term cure".

It said in a statement that the government should be primarily concerned with "the drastic lack of liquidity in the market".

Comparison website moneysupermarket.com said that the scheme offers "no details of the number of properties available".

It also noted that the 20 per cent rental discount would save only enough for the minimum five per cent deposit on a house after approximately five years.

The website also asked: "Where are the lenders to meet the demand for mortgages?", adding that healing the "frozen market" would take "a lot more than this".

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