New housing scheme greeted with cautious optimism

By Jonathan Dawes, Wed 30 Jul 2008 - Published in Mortgages

A new government initiative could help some people save the money needed to secure home loans, according to Firstrung.

The rent now buy later scheme will allow households earning under Ł60,000 to rent at 80 per cent or less of the going rate for a couple of years so they can set aside a deposit for a mortgage.

Commenting on the project, Paul Holmes, chief executive officer of Firstrung said: "There doesn't appear to be a sting in this tail."

However, he stated before making a final judgement he would wait until the full details were released by the government.

Mr Holmes added the reach of the initiative would be limited as a number of first-time buyers would be earning too much to qualify.

The Home Builders Federation claims demand for new properties is not being met by supply.

It states 160,000 new homes were built in England last year, while households are growing by 223,000 annually.

The government intends to construct 240,000 homes a year by 2016 and a total of three million homes by 2020.

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