Covid-19 gives Rentplus the opportunity to expand support to partners ensuring affordable housing for key workers
Rentplus, the affordable rent to buy provider, has seen its pipeline increase by a third in the last six months as it looks to meet the growing demand for affordable housing. In a time when it has become clear that the UK needs to do more to look after our key workers, Rentplus has adapted its business model to support local authorities and ensure better provision of homes for key workers and others who struggle to get on the property ladder due to high deposits. This group makes up 57% of its affordable rent to buy tenants.
The company utilised the slow property market conditions earlier in the year brought on by lockdown to scale up its homes pipeline. Rentplus has had offers accepted by a range of property developers on additional units which were originally earmarked for private sales. The company is also in discussions with housing associations to help deliver additional units which do not required grant funding from Government. This helps address the issue the affordable housing sector has experienced as housing associations across the country look to reconsider their development pipelines to preserve cash and protect themselves against loss of income brought about by the coronavirus pandemic.
Rentplus has now had offers accepted or completed on nearly 1,200 units for its rent to buy portfolio, which will be offered to tenants on affordable rental agreements, giving them the opportunity to purchase in 5,10, 15 or 20 years. It has another 7,100+ units in its sights, including a significant number originally earmarked for private sales. The total Rentplus pipeline is now over 18,000 homes.
Rentplus’ model is centred on partnering with Housing Associations to find and secure suitable tenants from council waiting lists leases. Leases are long terms and the tenant has an opportunity to buy the property at 5,10, or 15 years. Paying affordable rent (discounted to 80% of comparable private rents locally) means that the tenant can immediately start saving towards their deposit to buy the home they are living in. At the point of purchase, Rentplus uniquely gifts the tenant a 10% cash sum towards their deposit, thus removing the largest barrier to home ownership
Steve Collins, Rentplus Chief Executive Officer said:
“During lockdown, at a time when housing associations thought they would have to halt the purchase of land and new-build homes, and housing developers were unable to realise sales, we saw an opportunity to take on further sites by adapting our business model. This has not only enabled us to accelerate the growth of our pipeline by over a third, but also enables us to ensure the provision of housing for key and front line workers - the very people who were keeping the country afloat during lockdown.”
Historically Rentplus only acquired properties from developers under the section 106 agreement. Over the last six months the company has agreed to acquire units on the free market from smaller property developers looking for ways to release returns from their developments.