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Prospective homeowners who are struggling to save for a deposit may benefit from a new rental policy in Caerphilly County Borough.
The local authority is planning to introduce a new “intermediate” band of housing stock for people who do not qualify for council homes but may not be able to afford their own property.
Tenants who join the new system would pay 80% of the average private sector rent prices in the borough.
It is hoped the first homes will be added to the new scheme when the council completes a major redevelopment of the former Oakdale Comprehensive School site.
Cllr Shayne Cook, the cabinet member for housing, said intermediate renting “is aimed at people on low to medium incomes who cannot afford to buy a home outright but can afford to pay more than a social rent”.
“Reducing housing costs can help the households save towards future homeownership,” he told the council’s housing committee on Tuesday April 28.
During a recent public consultation, a common theme among respondents was they felt the upper thresholds for earnings were too low.
In its current draft form, the new policy means people will only qualify if they earn a maximum of £25,000 annually for single tenants, or a combined £40,000 annually for couples.
A committee report shows some consultees argued those thresholds should be doubled – but the council said it had analysed the borough’s rents and found those salaries would allow people to pay 80% of market rates.
Cllr Shane Williams asked whether the local authority was “confident” it had set the correct thresholds.
Housing director Nick Taylor-Williams said officers had “a long debate” about the matter, but decided setting higher thresholds risked “excluding” people the policy “is trying to address”.
“This is trying to target the squeezed middle, as I would call it – those who can’t afford to get a deposit, or those who can’t afford a mortgage,” he explained.
“We all know the challenges that’s presenting now. It’s getting more and more challenging. Look at the 6,000-plus that we’ve got on our housing register, and those that are way down the priority order. This is possibly giving them a real solution out of the private rental market.”
Cllr Judith Pritchard asked whether the new policy would mean some existing council homes were converted to intermediate rent properties.
But Mr Taylor-Williams said it was “absolutely focused on building new supply” and it would be unlawful to amend existing social homes.
“It wouldn’t exclude properties we might want to acquire – they would be new to our stock,” he added.
Cllr Cook added the availability of new intermediate rental homes would depend on “site characteristics, scheme viability, and the availability of Welsh Government grant funding”.
According to the report, the council’s cabinet members are expected to make a decision on the new policy in May.
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