ANKARA
Nick Clegg, leader of the centrist Liberal Democrats Party, announced Friday his party’s Help to Rent scheme, to support young working Britons move out of their family homes and into rented property.
The scheme would allow people between 18 and 30 to borrow up to £1,500 or £2,000 in London, to use as a deposit to rent their first home.
The average rental deposit in the U.K. is usually six weeks of rent, £1,200. The government loan would be repaid over 12 or 24 months.
Those seeking to take advantage of the scheme would have be aged between 18 and 30, be in paid employment and not be a homeowner or seeking social housing tenancy.
The interest rate on the loan would be pegged to government borrowing costs, currently around 2.5 percent.
Once paid off, the money could be used for future rental properties.
‘Clipped wing generation’
The Liberal Democrats claim research shows around 2 million young adults still live with their parents despite being in paid work.
Clegg said this generation is sometimes referred to as “the clipped wing generation” or “the boomerang generation” as rising rental costs mean many young workers cannot afford a tenancy deposit on their own home or flat, unless they have financial assistance from their parents or friends.
The knock-on effect, the Liberal Democrats claim, is young adults living longer with their parents.
This in turn leads parents to either upsize or delay downsizing their family homes to accommodate their older children, which reduces the overall availability of family homes in the housing market, the party claims.
“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." Clegg said while speaking on the campaign trail in south-west England. "It's simply unfair that thousands of hard-working young people still have to live in the same bedroom they lived in when children."
"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," he added.
The Liberal Democrats announced previously that they would build 300,000 new homes per year and introduce a rent-to-own scheme, where first-time buyers rent their way to ownership.
The U.K. general election will take place on May 7, 2015.
