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Lib Dems unveil £2,000 ‘Help to Rent’ loans plan

The Liberal Democrats have unveiled a new campaign pledge to help young working adults rent their own homes with government-backed loans.

People will be able to borrow up to £1,500, or £2,000 in London, to go towards a tenancy deposit in England.

Borrowers need to be between 18 and 30, in paid employment and not be homeowners or seeking social housing tenancy.

Loans will be repayable over 12 or 24 months, and interest will be linked to the cost of government borrowing, currently 2.5 per cent.

Any outstanding debt could be transferred between properties, but tenants will only be eligible for a single loan.

Deposits would be paid directly into a protection scheme once a tenant has identified a property to rent, with tenants beginning repayment on their first month.

Deputy Prime Minister and Lib Dem leader Nick Clegg says: “Increasingly we see young people stuck in the family home as they can’t afford the upfront costs of a deposit to rent a property despite having a paid job.

“It’s simply unfair that thousands of hard-working young people still have to live in the same bedroom they lived in when children.

“When you get your own job, you want to stand on your own two feet, have your own space, and not have to rely on the bank of mum and dad.

“Our Help to Rent scheme removes this barrier to young people’s independence, providing access to up to £2,000 towards their tenancy deposit so they can fly the nest and rent their own space.”

The proposal comes after the Lib Dems announced plans for a Rent to Own scheme, designed to allow first-time buyers to gradually acquire homes by paying above market rates on rent.

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. Well Mr Clegg can you explain this to me?

    A working adult living at home claims that they cannot afford to save up funds to pay their rental deposit and associated fees.

    How do you expect them to go from this cheap accommodation to paying rent, household bills AND their loan repayment without getting themselves into a right old mess financially if they claim to be that short of money when they are living at home?

    A sharp short lesson in the realities of life is what is needed not another “bleeding heart” piece of lunacy from a bunch of political pygmies looking to buy a few votes.

  2. I have to say that’s not a bad idea at all. As long as loans are enforced though still, why can’t individuals recognise their own responsibility for saving a deposit and so on… or families and friends help-out? That’s where the education is so missing still.

  3. I have to second the above. If a ‘hard working’ individual who still lives at home fails to be able to save up £2000 by age 30- and cannot/will not apply for a loan from a bank….. should we be lending them money?

  4. The real issue is lack of housing (or a real housing plan), let alone social or low cost housing. These schemes are like putting a band aid on a large wound. Well meaning but need to try harder.

  5. If prospective tenants cant afford a month and a halves rent for a deposit upfront then the safest bet is to carry on living in that safe cosy bedroom they grew up in as children. As if there isnt enough personal debt floating around in the system what we dont need is more brownie scoring political nonsense like this before the election.

  6. I’m certainly not going to be voting FibDem, but this really isn’t a bad idea – in terms of labour mobility at least.

    There is of course something amiss in the idea of subsidising grown up kids who can’t save up a rental deposit despite working.

    But if you grow up in the North, go to a northern university that you leave with piles of debt, this could be a real life-line. Likewise, if you’re somebody previously working in a single industry town where the local factory folds, this could be a real life line in escaping to a job in another part of the country. In both cases, you might well have an irregular credit history and an inability to access conventional sources.

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