Rental and ownership options for youth introduced by Human Settlements
The Provincial Department of Human Settlements has developed a new human settlements product within affordable housing aimed at empowering young aspirant first time homeowners called Deferred Ownership. In simple terms this is “Rent to Own or Rent to Buy”. It will be officially launched at the end of June 2022.
The product is modelled from the Financed Linked Individual Subsidy Programme (FLISP) that has a maximum income band of R22000. Youth interested in home ownership through Deferred Ownership need to earn from R12000 – R22000. This product gives an opportunity to anyone including those with an impaired credit record to reach a point where they can be homeowners.
Potential beneficiaries will have an opportunity to rent a housing unit for a period of 6 to 24 months which is defined as the suitable period to rehabilitate someone’s credit score. Once the credit score is rehabilitated the beneficiary will be able to buy their rented home through a bond. Fifty percent of the rental goes towards a savings account to assist with buying the home.
“This is a massive policy shift for our provincial Department. It is the first of its kind. Affordable housing through Deferred Ownership is the bridge for the youth into the open market. It focuses on how we can assist young people that want to enter the housing market by purchasing a house in the open market, if not through one of the Department’s various housing projects. It can also assist young people to build a good credit record that can assist them when they are ready to take a bond through a financial institution,” said Minister of Infrastructure, Tertuis Simmers.
The Department also has rental options for Youth through its Social Housing programme. Social Housing is a rental only housing option for households earning between R1 850 - R22 000 per month. Social Housing projects are managed by accredited Social Housing Institutions. Young people are encouraged to contact Social Housing Institutions that manage the Department’s various Social Housing projects for an opportunity to rent a unit.
The Department is committed in establishing innovative ways to offer a range of rental and ownership options that respond to the varied needs and incomes of Western Cape citizens.