The Potential Role Of Tokenization In Affordable Housing
30 Jun 2020 — Helping The Not-So-Affluent Own Houses 🏠 Through #Tokenisation
Buying a house is arguably the largest and most complicated financial commitment most people will ever make. While the rich will have no problems in securing their homes of choice, to most, our purchases are normally government-assisted through some form of housing policy.
Besides the many benefits of tokenizing Real Estate i.e. fractional ownership, immutable ownership proof, higher liquidity, is it the best answer to property shared ownership by private sector?
The UK government helps first time home buyers get a property with just a 5% deposit through a Shared Ownership scheme. This allows the purchasers to buy a share of their home (25% to 75%) and pay rent on the remaining share. Up to June 2019, the UK government made an overall profit of 11.4% on repaid equity loans.
Through the token economy, a private-sector led incentives to affordable housing can be created. The fractional ownership and easy access to security tokens through exchanges will appeal to investors. In addition to increasing private capital into affordable housing, tokenization incentivises tenant behaviour that benefits property owners and investors as well as the tenants themselves.