Lib Dem ‘boomerang generation’ vow

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Published: Friday 10th April 2015 by The News Editor

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Grown-up children stuck living with their parents would be able to claim a Government loan of up to £2,000 to move out and rent their own home under proposals set out by Nick Clegg.

The Liberal Democrat plan would mean people in work aged between 18 and 30 could use a low-interest loan to fund the deposit needed to rent a property.

Mr Clegg said the policy would help the “clipped wing generation” who are unable to leave home and the parents “who want their kids out of their hair”.

Under the Help To Rent scheme, which the Lib Dems expect could be taken up by around 1.8 million people, successful applicants would use the loan worth up to £1,500 – or £2,000 in London – to meet the cost of their deposit.

The money would start to be repaid from the first month, with applicants having the choice of a 12-month or 24-month term.

Interest on the loan would be pegged to the cost of government borrowing, currently around 2.5%.

If the property was damaged and the tenant lost their deposit, they would still be expected to repay the government loan.

The loans would be available to all under 30s who are in employment and could afford the rent, do not own a house and are not on a social housing waiting list.

The Lib Dems claim the policy could also free up the housing market, with parents able to downsize after their children have left home.

Mr Clegg said: “You’ve got this generation that is sometimes called ‘the clipped wing generation’, or ‘the boomerang generation’, of an increasingly large numbers of youngsters – I think the estimates are now about two million people in their 20s and 30s – who simply can’t find the money needed for a deposit to rent a flat or home of their own.

“They simply can’t find the up-front costs to move into rented accommodation, so move back or stay with their own parents.

“That’s obviously unfair on them, because it means they’re just not getting their feet on the rung of the rented property ladder.

“It also has a big knock-on effect on what happens to the property market as far as families are concerned. It means that couples whose children have grown up are not downsizing as readily as they might because they have to keep large properties to maintain space for their kids. So we have a very simple idea which is in effect to extend a system of government loans.”

He added: “For those parents who want their kids out of their hair it will give them their own home back and for those parents who want to downsize it frees them up as well. It gives them a bit of extra flexibility in the housing market as well.”

Around £2 billion could be loaned in the first year of the policy, but the policy would not “cost the Government much in terms of year-in, year-out expenditure”, Mr Clegg said.

He added: “It’s simply unfair that thousands of hard-working young people still have to live in the same bedroom they lived in when children.

“When you get your own job, you want to stand on your own two feet, have your own space, and not have to rely on the bank of mum and dad. ”

Published: Friday 10th April 2015 by The News Editor

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