Closed doors – opening the housing market to young adultsStockholm , Sweden Economic sustainability, Relations to stakeholders, Target groups of housing
A first-hand contract or condominium is most often a distant utopia. Riksbyggen therefore propses young home loans – a new form of loan where the state gives young people the opportunity to invest in their first own housing. They have launched a model facilitating that outlook. Hyrköp caters to people aged under 35. Rent means that the tenants that do not have a first-hand contract or own a home have the opportunity to rent an apartment with the opportunity to buy it within 5 years. Furthermore the cooperative has proposed the government to introduce a governmental start up loan for persons 18-35 years old called Ungbolån. HSB, Sweden, has also started a project called HSB Dela (Share), with HSB co-financing 50% of the young person’s apartment.
The opportunities for young adults to obtain their own housing are severely limited in today’s Sweden. Housing shortages, long queuing times for rental apartments and restrictions on the possibility of obtaining mortgages work together and result in placing too many young Swedes outside the regular housing market. Many young people find themselves stuck in temporary solutions by subleasing. When the only way to dwell somewhere is through black leases, expensive and insecure second-hand contracts or with the support of financially strong parents, the negative effects are great – even at a socio-economic level.
So, what is a youth loan?
When young adults can spend their income on investing, saving and consuming instead of ocher rents, the entire social economy benefits. We propose that the state introduces a special subsidized housing scheme for young people. In the same way the general student support enabled many more than just the wealthiest to study, a similar investment in the housing market can give significantly more young people a chance to a first home according to seven basic principles.
– The loan is aimed at young adults aged 18-35
– The loan comprises a maximum of ten percent of the housing market value with a ceiling of SEK 300,000
– The borrower is responsible for the remaining 5 per cent of the cash contribution
– Banks can, as before, grant loans up to 85% of the market value
– The interest rate on the loan, just like the study aid, consists of the government’s borrowing costs plus the administration fee and is not deductible.
– The loan is amortized free for a maximum of five years
– Amortization requirement two is not applied
Why it works
Here’s how Hyrköp works: You get to rent the apartment with the option to buy it within five years. The rent must correspond to new production rent at the current location. The transfer price from the Riksbyggen to the residents corresponds to the highest original contribution with an annual increase corresponding to the consumer price index. Rents will primarily be offered to members of Riksbyggen Förtur, then other stakeholders. A maximum of 10% of the apartments in a tenant-owner association will be offered with rental. During the rental period, the Riksbyggen owns the apartment. If the tenant does not buy his tenancy, the person may remain as tenant. The rental apartments are not subject to exchange rights.