PHOTO: Housing Minister Megan Woods. FILE
Housing Minister Megan Woods recently revealed updates to the rent-to-buy home ownership scheme targeted at first-time buyers, making it accessible for existing homes in addition to new builds. The initiative, which encompasses rent-to-buy, leasehold, and shared equity arrangements, will now be available to buyers seeking existing homes, and the income cap has been raised to $150,000.
The changes aim to enhance the range of housing options, including more affordable choices in various locations. The adjustments were made in response to the impact of house price inflation since the scheme’s launch, which affected its uptake. By expanding the eligible properties, the government seeks to accommodate more households in need.
The progressive home ownership scheme, originally valued at $400 million, was established in 2020 with the primary goal of assisting low-to-median income households, particularly Māori and Pacific whānau with children, who faced challenges in accumulating a sufficient deposit or securing financial support to purchase their first home.
As of now, 861 new homes have been contracted for building, and 472 households have successfully moved into their new homes under the scheme.
In light of the evolving housing and construction markets since 2020, characterized by property price fluctuations due to higher interest rates and supply chain challenges leading to rising inflation in construction materials, these adjustments are seen as necessary to ensure the scheme remains effective and beneficial to prospective homeowners.
Initially, the government’s objective was to aid 4000 families in achieving home ownership through the scheme. However, it has now set a target of getting 1500 homes contracted by June 2023.
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Additional changes to the scheme, set to take effect on August 14, include expanding the exemption on the income cap for intergenerational whānau and enabling eligible families of six members to participate. Furthermore, the application process will be made more flexible and faster, and the time allotted for paying off rent-to-buy and shared equity schemes has been extended from 15 to 20 years.
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