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Liberal Democrats Announce Help To Rent Scheme

Liberal Democrats Announce Help To Rent Scheme

Help To Rent Scheme To Support Young Workers 

Liberal Democrat leader Nick Clegg has announced plans for a new ‘Help to Rent’ scheme should his party get elected to power in May. The scheme is intended to support young workers who want to move out of their parents homes and rent their first property in the private rental sector (PRS).

According to some of the latest research it is thought that around two million young working adults still live with their parents because they cannot afford to move into a property of their own, either purchased or rented.

The proposals for the Help To Rent scheme will include a government loan of up to £2,000 (GBP) in London, and £1500 (GBP) in other UK regions to cover the cost of tenancy deposits, with loan repayments staged over 12 or 24 months.

To be eligible for the proposed Help To Rent scheme and secure a loan for a deposit, tenants would need to be in paid employment, aged between 18 to 30 and not be property owners or seeking a tenancy in social housing provided by local authorities. 

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Mortgage Market Review Already Causing Delays For Borrowers

Mortgage Market Review Already Causing Delays For Borrowers

Mortgage Market Review Already Causing Delays For Borrowers

Would be residential property buyers are dismayed about the change of the rules on residential mortgages, with strict lending criteria tightened following the introduction of the Mortgage Market Review (MMR).

Since 26th April 2014, mortgage lenders have been required to carry out much more detailed checks of a borrower’s financial situation to be sure that they can truly afford to purchase and continue to afford the property, both now and in the future.

The introduction of the MMR is supposed to help regulate the residential property purchase market and does not yet apply to buy to let mortgages, but that could happen in time.

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More and more young adults are still living with their parents, unable to afford to rent or buy property of their own according to the Office for National Statistics.

Last year, the ONS say nearly three million adults aged from 20-34 were living with their parents, an increase of 20%, since 1997, that’s an increase of almost half a million people!

The rise comes despite the fact that the number of people within this age group has barely changed.

Altogether, 64% of men, almost two in three, aged between 20-34,  now lives with his parents, and so do 46% or nearly half of all women in the same age bracket

However, by age 34 there is a rapid change of circumstances, with only 7% of men and 2% of women still living with their parents.

David Orr, National Housing Federation chief executive, blamed the rise on the lack of affordable homes, saying: “The options are severely limited and out of reach for many young people. Much more needs to be done to tackle this country’s dire housing crisis.”

The average age of the UK first-time buyer is now 30, according to research from Clydesdale and Yorkshire banks, but varies considerably across the UK: for example, 28 in Yorkshire, but 36 in Wales and 33 in London.

According to LSL’s latest index, the average monthly rent across England and Wales is now £709 – 2.4% higher than in 2011.

The latest survey by the Association of Residential Letting Agents, (ARLA), has indicated that property rental prices within the Private Rental Sector (PRS) may be beginning to level out.

The ARLA survey quizzed 726 letting agents and over 1500 landlords, and the results showed that just 50% of all respondents reported an increase in their achievable rent level over the first three months of 2012, that’s 10% less than this time last year.

It also emerged that the average void period for rental properties in the PRS has increased to 3 weeks and the number of new tenancies being signed has reduced.

ARLA believe that the new figures indicate that tenants are staying in rental properties for longer periods of time, however some property pundits reckon it could be an early warning that private sector rental property demand is falling, or worse still it could mean that a growing number of tenants can’t afford to pay the rents being charged.

President of ARLA Tim Hyatt commented on the findings saying; “Data suggests that things could be changing in the private rented sector as the amount being charged for rent is beginning to stabilise in some parts of the UK. This could be due to a number of factors, including an increase in haggling, forcing rent levels down.”

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