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Social rent subsidy is waste of money, says CML

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  • 16/12/2002
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According to the CML, the government is wasting money on subsidising social renting. Research carr...

According to the CML, the government is wasting money on subsidising social renting.

Research carried out by the CML in Housing Finance, its quarterly journal, showed low-cost home-ownership schemes to be more cost-effective than subsidising social renting.

The main low-cost home-ownership schemes are shared-ownership schemes, which function on a part-buy/part-rent basis and Homebuy. Homebuy provides an interest-free loan for buyers to use as a top up to a conventional mortgage, reducing the overall cost of servicing the total debt.

Peter Williams, deputy dir-ector general of the CML, said: ‘Value for money is key and low-cost home-ownership looks like a useful mechanism for the Government to exploit further.’

But a spokesman for ARLA questioned whether locking people into such long-term deals was appropriate.

He proposed a change to the benefit system that would allow the bottom end of the rent market to more easily move into the mainstream and suggested a move away from benefits being paid in arrears.


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