A person especially the tenant always has a dream to own a home but the factors like availability of home loan, budget-friendly property and location affect the time of being a homeowner. The rise in income, better job opportunities and the fact that both the partners are earning make a huge lot of difference. Although the tier I cities have more of the tenants in comparison to the tier III and metro cities. The tenancy level is recorded at 37 percent in tier I cities whereas it is 23 and 29 respectively in tier III and metro cities.
Factors that turn tenant into a homeowner:
The biggest factor that pushes the tenant to switch into being a homeowner is budget. A person starts taking steps towards owning a home after calculating that both the EMI i.e. the equated monthly installment and the rent he/she is currently paying fits in the same payable bracket. The happiness of owning a home is priceless and it becomes more valuable when the same is achieved at a young age.
Launch of Affordable Housing Scheme:
The introduction of the Pradhan Mantri Aawas Yojna i.e. PMAY is one of the factors responsible for the makeshift of tenants into homeowners. This scheme is also popular as the Credit-linked Subsidy Scheme [CLSS] offer a subsidy of Rs. 2.67 lakhs to the home buyers falling under the EWS [Economically Weaker Section] category and also to the women homebuyers. This scheme has recorded an increase in the number of tenants turning into homeowners and also gave a boost to the Indian real estate sector.
Lower Interest Rate:
The reduced interest rate on the home loan of Rs. 12 lakh and 9 lakh upto three-four percent made the tenant realized that they can live the dream to own a home. In fact, even a small dip in the BPS i.e. the basis points reflects onto the long term home loan. In the past five years, the consistent dip in these points has garnered a sense of confidence in the tenants to own a home.
Formation of RERA:
The formation of Real Estate Regulatory Authority in the first tenure of the Modi Government has paved way for lakhs of tenants in India to think about owning a home. Till now, the delayed and mid-stuck projects by various developers made the tenants think twice about stepping into the real estate sector to own a home. But, the RERA authority has made them feel secure about the refund, cancellation and even about the fact that their hard earned money will not go into the vain.
Challenges faced by Tenants to be the Home Owners:
Zero Loan History:
The biggest challenge for the tenants is zero loan history to their credit as they step in the property market to own a home. The tenants who never took any kind of loan find it a bit difficult to avail a home loan as the financial lenders have to be assured about the repayment of the sanctioned loan.
Shirked Umbrella of Tax Benefits:
The tax benefit umbrella should be expanded for those availing a home loan. The availability of subsidies on other factors apart from the EMIs should be considered by the Government as this is one of the biggest challenges faced by the tenants who plan to be the homeowners.
Hassle-Free Connectivity to Work Place:
The traffic jams result in the long duration of travel between home and workplace. Thus, the option to own home in the strategic location that too in a budget-friendly manner is a big challenged faced by the tenants at the time they think about turning into a homeowner.