Research conducted by Rentplus, the affordable rent-to-buy provider, has revealed the full impact of the COVID-19 pandemic on aspiring homeowners.
* Research from rent-to-buy provider Rentplus finds three in 10 (29%) key workers say COVID-19 crisis has made home ownership less achievable
* Over a third (38%) of all NHS and key workers say they have less money as a result of the COVID-19 pandemic
* Saving for a deposit (29%) tops the challenges for key workers when thinking about buying a home
Key workers, who already find it tough to get on the housing ladder despite shared ownership and similar schemes, are finding things even tougher with three in 10 (29%) of these who rent saying it’s become less achievable as a result of the global pandemic.
With house prices rising 3.4% over the year to June 2020*, mortgage lenders pulling their high LTV deals**, and the stamp duty holiday only serving those more affluent buyers***, key workers have been hit with a toxic triple whammy as they try to take their first step onto the housing ladder. Nurses have been hit particularly hard, as one of the groups left out of the recent pay rises announced by the government back in the summer.
The research also found that over a third (38%) of all NHS and key workers say they have less money as a result of the pandemic, putting home ownership that bit further out of reach.
Of the challenges NHS and key workers faced when thinking about purchasing a home, saving for a deposit topped the list (29%), with their salary not being high enough (28%) and homes in their area not being affordable (25%) also ranking high.
Over four fifths (86%) of those key workers who do not own their home would like to do so, with those currently renting having done so on average for seven years.
In order to address this challengers, three quarters (75%) of the general public surveyed would support initiatives which provide extra support, with 25% saying the public sector should pay, 9% the private sector, with half (53%) saying it should be a mix of private and public.
In response to the findings, Steve Collins, Rentplus Chief Executive Officer, said:
“Beyond the headlines of a “housing boom”, there lies a divided housing market, where those on lower incomes are increasingly shut out and struggling to get on the property ladder.”
“Many of these people are keyworkers; our nurses, care assistants and supermarket workers who continue to serve on the frontline during this pandemic and who want the chance to own their own home. With eye watering house prices and rising private rents, it is virtually impossible to save for a deposit, and with that the possibility of home ownership moves further away. That’s why we gift a 10 per cent deposit to help overcome what is for some, an insurmountable hurdle.
“Although proposed solutions to the UK’s housing problem have been piloted they have failed to gain real traction and, in some cases, made the situation worse. There is a real need to increase the use of creative approaches if we are to make any progress at real scale and give our valued keyworkers the opportunity to own their own home.”
Qualified NHS nurse, Nicole Richards, 27, from Northampton was one of the many key workers who found it impossible to save for a housing deposit, due to expensive private rented accommodation and essential outgoings.
Nevertheless, Nicole was finally able to circumvent the “deposit barrier” after moving into one of Rentplus’ unique homes in May 2017. She is now paying a reduced rent on a new build home and saving for a deposit to buy the property. In five years, Rentplus will also gift 10% of the sale price towards her deposit.
Rentplus’ unique affordable rent-to-buy proposition offers those on lower or middle incomes, without savings, the chance to rent a property for between five and 20 years. During this time, they can save towards a deposit, and build a good credit rating which will allow them to get a mortgage when they decide to buy. A majority of its tenants are key workers.
Commenting on her new home, Nicole said:
“I’d been renting for about six years and I have never been able to save as much as I am now. Rentplus is a fantastic opportunity to help people such as myself to save to purchase their first home and I am so grateful to find this opportunity”.
The research was conducted by Opinium Research between 28 August and 2 September among 2,000 UK adults and 500 NHS/key workers.