Rentplus-UK welcomes the Housing, Communities and Local Government Committee’s report into the Affordability of Home Ownership, describing it as a significant and timely contribution to one of the most pressing social and economic challenges facing the country.
The report concludes that the ability to buy a home increasingly depends on access to family wealth rather than personal effort, income or aspiration, something Rentplus recognised back in 2014, and why its’ Affordable Rent To Buy proposition has proved popular with tenants.
The committee acknowledges that increasing housing supply alone will not solve the affordability crisis and that a range of innovative tenure solutions are required alongside increased housebuilding.
Rentplus-UK believes this is where Affordable Rent to Buy has a critical role to play.
The Rentplus model provides homes requiring no upfront deposit, let at affordable rents, typically up to 20% below market levels, whilst allowing households to save for ownership for a period of 5-20 years. At the point of purchase, Rentplus gifts tenants a 10% sum towards their deposit, helping families overcome one of the biggest barriers to home ownership.
Unlike many traditional affordable housing products, Rentplus is specifically designed for those who fall between social housing eligibility and open market affordability.
Since its inception, the Rentplus model has enabled tenants who otherwise would have remained permanently excluded from the housing market to become home owners, buying 100% of the home they live in.
Steve Collins, Chief Executive of Rentplus-UK, said: “The Committee’s report highlights what many of us have known for years: that the current housing system fails a significant proportion of working people.
“There are now around 1.5 million households trapped in what we often describe as the ‘forgotten middle’ – not poor enough to qualify for traditional affordable housing, yet not affluent enough to access home ownership through the open market.
“These are our nurses, teachers, police officers, care workers, delivery drivers, construction workers, retail staff and countless others who contribute every day to their communities but find themselves locked out of home ownership.
“Home ownership is out of reach for millions of working households with house prices more than seven times average earnings compared with less than four times average earnings in the 1990s.
“For too long, housing policy has focused on either social housing or market housing, with insufficient attention given to the growing number of households caught between the two.
“We need to take the bull by the horns and create a fairer housing system that reflects the reality of modern Britain. Government should do more to support Rentplus and others who are investing private funds into housing, giving an that forgotten middle an affordable route to home ownership to key and essential workers – and at no cost to the public purse.
The Committee’s findings reinforces the need for innovative intermediate housing products that genuinely bridge that gap.
Collins added: “The question is no longer whether we need alternative routes into home ownership. The evidence is overwhelming. The question is how quickly we can scale those solutions to meet the need.
“Every year that passes without action means more young families delaying life decisions, more key workers priced out of the communities they serve, and more people resigning themselves to a lifetime of renting despite doing everything society asks of them.”
Rentplus-UK also welcomed the Committee’s recognition that housing affordability is not simply a housing issue but a wider economic and social challenge affecting productivity, labour mobility, health outcomes and community stability.
The organisation is calling upon Government, local authorities, housing associations, institutional investors and housebuilders to work together to create a broader range of affordable home ownership opportunities that reflect local housing need.
“Home ownership should not be determined by whether your parents can write you a cheque: it should be determined by aspiration, hard work and opportunity,” continued Steve Collins.
“If we are serious about restoring the dream of home ownership, we must create pathways that work for the forgotten middle. Affordable Rent to Buy is one of those pathways and we stand ready to work with Government and partners across the sector to help deliver it at scale.”
ENDS
Notes to Editors
• Rentplus-UK is the UK’s leading Affordable Rent to Buy provider.
• The Rentplus model provides affordable rented homes with a pathway to home ownership through a route that requires no upfront deposit, a 10% gifted deposit on purchase at fixed purchase points from 5-20 years.
• Rentplus homes are allocated through local authority nomination agreements and supports local housing priorities.
• c70% of Rentplus tenants buy their homes at the proscribed time – and they are buying 100% of their home aided by the 10% gifted sum: no staircasing
• Rentplus Homes, the Registered Provider arm of Rentplus-UK consistently demonstrates some of the highest levels of customer satisfaction in the industry