Over 40% of young adults living in the Metro-East region have abandoned hope of purchasing their first home within the next decade. The primary obstacle is the steep deposit requirement set by commercial lenders, which now averages 20% of the purchase price. Seeking to bridge this gap, the regional authority launched the First-Step Shared Equity (FSSE) Scheme. Under this initiative, the government provides an interest-free equity loan of up to 15% of the property value, meaning eligible buyers only need to save a 5% personal deposit.
While the scheme has enabled hundreds of households to transition from renting to owning, critics argue it targets the symptoms rather than the cause of high housing costs. "The FSSE scheme has undoubtedly helped middle-income earners escape the modern 'rent trap', where high monthly rent payments prevent people from saving a substantial lump sum," noted housing market analyst Sarah Jenkins. "However, by boosting demand without a corresponding increase in housing supply, we risk inflating house prices further. Furthermore, the exodus of reliable tenants into homeownership is beginning to reshape local rental markets, forcing private landlords to reconsider their yields and pricing strategies."
With reference to Extract A, assess the likely impact of the First-Step Shared Equity (FSSE) Scheme on the market for private rented properties.
