The Liberal Democrats would give first-time buyers a leg up on to the housing ladder with a “rent-to-own” scheme, the party leader, Nick Clegg, has announced.
The party’s proposal would give people without a deposit the option of paying monthly instalments towards the cost of a home, without having to raise a deposit. After 30 years of such payments, the buyer would own the home outright.
The Lib Dems say they would create 30,000 rent-to-own homes by 2020 by working with housing associations and other organisations.
The housing policy announcement came as the party gathered in Liverpool for the start of its spring conference this weekend, where members will vote to decide which policies will end up in the Lib Dems’ manifesto.
However, recent polling puts the party on course for just 8% of the vote, compared with a high of 34% – above Labour and the Conservatives – in the weeks before the 2010 general election. With these numbers, the party could lose as many as half of its 56 seats, but may still end up as a key coalition partner if the election results in a hung parliament.
Under the Lib Dems’ proposed rent-to-buy scheme, occupants could cash in at any time, potentially leaving them with money for a deposit that could be used in the open market.
The average first-time buyer in London needs a deposit of £64,000 to buy a home, making it a significant barrier for young people wanting to purchase property.
Political parties are competing to make attractive offers on housing to young voters struggling to get on the housing ladder or find secure accommodation. The Conservative party has pledged to build 200,000 starter homes priced at 20% below the market rate for first-time buyers under 40, while Labour has promised to build 200,000 new homes a year by 2020.
Clegg said that for working young people “the dream of home ownership is increasingly out of reach”.
“Prices are so high renters cannot afford to save for a deposit, which means they can never take that first step on to the housing ladder,” he said. “Young people deserve better. Rent-to-own will mean, regardless of their background and family circumstance, they will be able to make this dream a reality.”
The policy is inspired by a scheme run by the social enterprise Gentoo Group in north-east England, which is planned to be expanded to London later this year.
Home ownership among the under-35s has fallen in the past decade, with just 36% of 25- to 34-year-olds owning their own home, down from 59% the previous decade.
Lib Dem activists will be invited to vote for policies such as balancing the current budget by 2016-17, equality for treatment of mental health conditions, reforming party funding and cutting income tax for low and middle-earners.
The party suffered embarrassment this week when one of its parliamentary candidates and its former head of fundraising, Ibrahim Taguri, was reportedly caught telling an undercover Daily Telegraph reporter how he could get around party funding rules and donate more than £7,500. Taguri stepped down as the party’s candidate and left the party, while denying any wrongdoing.
Former Lib Dem leader Paddy Ashdown said the party had done “absolutely nothing either illegal or improper. We have not received any cheques.”
The Telegraph also alleged that Taguri arranged a private meeting between the undercover reporter – who was posing as an Indian businessman – and Danny Alexander, chief secretary to the Treasury, claims Nick Clegg said were “categorically untrue”.
