The Government should encourage local authorities to promote the development of alternative forms of affordable housing that are privately funded, to boost supply, says leading home ownership provider, Rentplus.
The Social Housing Green Paper does not commit any new funding, and the proposal for tenants to purchase 1% of their shared ownership home each year will not add to the supply of new affordable homes to buy.
Privately funded affordable housing models, such as Rentplus' affordable rent to buy proposition, inject new money to provide additional affordable homes for working families who are would-be buyers.
The model provides new homes at an affordable rent with a long-term secure tenancy of 5-20 years, with a gifted cash deposit worth 10% of the property’s market value when tenants come to buy. This fits well with the Government’s commitment in the Green Paper to encourage “innovative models that help tenants that are struggling to raise deposits”.
Under shared ownership, tenants can be responsible for the costs of all maintenance work on their property despite not fully owning it. The Rentplus affordable rent to buy proposition does not come with this liability as tenants are 100% renters and then 100% home owners. During the rental period the property is managed by a housing association partner who takes care of any repair work, so tenants can focus all their money on saving for a deposit.
Chief Executive of Rentplus, Steve Collins, said; “There is huge scope for private funding to be used to develop affordable housing and we call on the Government to encourage more local authorities to consider our alternative model. "The recent changes to the National Planning Policy Framework confirm that models such as Rentplus count towards local authorities’ affordable housing provision, so they have the flexibility to choose a range of tenures to meet local need.”