Plan to allow buyers to rent before purchase Published: 16/07/2008

The government has unveiled a new scheme designed to help first-time buyers gain access to the property market by allowing them to rent before purchasing.

The pilot initiative will entitle households earning up to £60,000 to rent property at a discounted rate for two or three years while saving sufficient funds to cover the deposit.

Rents of 80 per cent or less of the true market value will be charged to eligible house hunters, who can eventually buy a share in the home, or purchase the whole property.

Managed by the Housing Corporation, the new scheme will allow those unable to buy to stake their claim to their own home, while continuing to rent, or move on and sell their equity stake.

Ministers hope the Rent to Homebuy programme will give prospective homeowners more choice and flexibility at a time when mortgages aimed at first-time buyers are becoming scarcer.

"We are determined to continue to do everything possible to promote long-term stability and fairness in the housing market," said housing minister Caroline Flint.

Housing Corporation chief executive Steve Douglas added: "We believe that a Rent to Homebuy option will be attractive to customers in the current market and will help associations and developers managed their sales risk."

Despite recent falls in the average price of a house for sale, the lender Halifax reports that the average property in the UK is still worth more than £180,000.

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