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The Times: Could families in the UK soon be buying homes without a deposit/mortgage?

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Families in rented accommodation may be allowed to buy their homes without a deposit or mortgage under “buy as you go” plans being studied by ministers.

Housing associations say that they could build 335,000 homes in four years if the government backed the proposal with funding and changes to investment rules.

Senior government figures said that they were considering the plan, from the National Housing Federation, but played down a report that it would be included in the autumn statement on November 23.

Theresa May made housing a priority in her mission to do more for families who were “just managing”, and a consultation document is expected in weeks. The prime minister’s allies say that she wants to shift the focus from outright home ownership, in what would be a change of direction from the approach taken by David Cameron and George Osborne.

Under the proposals, tenants would start building an equity stake from the day they moved in and would own the property outright after 25 to 30 years.

Housing association tenants typically pay between 60 per cent and 80 per cent of the market rent. Those in the “buy as you go” scheme would pay a 10 per cent surcharge that would effectively become their equity stake.

They would be able to end the arrangement by buying outright, moving to a shared ownership scheme, selling on the open market and sharing the receipt with the association or selling their stake back at a pre-agreed price.

The news comes as a former minister is poised to ask Philip Hammond, the chancellor, to “think big” in reshaping the economy. In a paper to be published tomorrow, John Penrose, Conservative MP for Weston-super-Mare, will argue that the government should spend a fixed proportion of GDP on long-term infrastructure, akin to the legal 0.7 per cent target on international aid introduced by Mr Cameron and the 2 per cent defence budget mandated by Nato.

Mr Penrose wants more to be spent on short-term infrastructure, even though it would “inevitably mean a slightly longer wait to eliminate the government deficit and achieve a balanced budget”.

He will criticise the “very high levels of accumulated national debt” which, although partly a hangover from the 2008 financial crisis, is also a consequence of “the promises we’ve made in our pensions and benefit system”.

To fund social security commitments he will call for a sovereign wealth fund to be built up over several generations, in part through a “national debt charge” levied from income tax. The fund should be managed by independent trustees.

In comments to the Lords’ economic affairs committee in September Mr Hammond appeared to hint at an expansion of short-term infrastructure spending but insisted that any fiscal stimulus would be modest and limited in duration. He has apparently been warned by cabinet colleagues that a significant fiscal loosening could be interpreted by the public as suggesting that there was reason to panic over Brexit.

 

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