Mixed reaction to UK 'rent now, buy later' plan

July 18, 2008 by OPPE News

Industry experts have given a mixed reception to new UK government measures designed to prop up the country’s property market. Agents, property investors and trade bodies welcomed the housing minister’s proposals, which include a ‘rent now, buy later’ scheme for first-time buyers.

However, many called for tougher action and said the government would need to be “bolder” if it was to reinvigorate the property market.

On Wednesday the Department for Communities and Local Government unveiled the seven-point ‘action today, innovation for tomorrow’ plan. Housing minister Caroline Flint said:

“We are determined to continue to do everything possible to promote long-term stability and fairness in the housing market.”

As part of the proposals households earning less than £60,000 a year will be able to rent a new home at a discounted rate for two to three years, using the low payments to help them save for a deposit.

Other ideas include more responsibility for councils to provide land for new homes and up to 75,000 extra new houses in high-demand areas. Peter Williams, executive director of the Intermediary Mortgages Lenders’ Association, said the rent before buying idea was a

“sticking plaster, not a long-term cure”.

The Campaign to Protect Rural England said it welcomed some of the measures but added it was concerned the government had not properly considered the risks of a housing growth scheme in the current economic climate.