After 7 years stuck in the private rental sector in Stoke in Plymouth, the Rafiq family finally have a home to call their own. Muhammad Rafiq, a 46 year old engineer at an aerospace firm, together with his wife Maria, a 36 year old stay at home mother, have recently moved into their Rentplus home - a two bedroom house located at Persimmon’s Palmerston Heights part of the new Seaton Neighbourhood development in Plymouth. Before moving into their new home, the Rafiq’s found it impossible to save for a deposit as more than 25% of their monthly income was eaten up by rent each month. The Rafiq’s are not alone - saving for a deposit continues to be one of the biggest obstacles to home ownership. Recent figures from Shelter reveal that 86% of people say they would like to own their home, but 75% of renters are unable to save more than £100 a month towards a deposit.
Through Rentplus’ unique model, the Rafiq’s will have the opportunity to buy their home in just five years, in the meantime benefiting from an affordable intermediate rent set at the Local Housing Allowance (LHA) level plus no maintenance costs or service charges to pay while they rent; and when it comes time to buy their home, Rentplus will gift them a 10% deposit towards their purchase! When Mr Rafiq found out about Rentplus’ innovative rent-to-buy model he couldn’t believe his luck. He comments: “Our dream has long been to own our own home but with the high costs of renting combined with the need to save thousands of pounds for a deposit it’s never been in reach for us. This model is ideal for our needs as we have the certainty of living in the home which we will one day own and the reduction in rent is making a huge difference to our lives. Owning your own home is one of the greatest things in life – knowing that we won’t have to move again because of rising rents or at a landlord’s discretion ensures that we can plan ahead and establish real roots in the local community. We love living in Plymouth – our daughter attends a local nursery and both the sea and local countryside are on our doorstep. Our quality of life has vastly improved.”
The Rafiq family have set a goal of purchasing their two bedroom home in 5 years. Their new rental costs mean that they have the potential to save up to £200 a month versus market rent for a similar property in the area and they plan to make additional savings too. These savings can be put towards their deposit and other purchase costs in addition to the 10% gifted deposit from Rentplus.
The Rentplus rent-to-buy model offers five year renewable tenancies at an affordable intermediate rent, set at 80% of market rent, or at LHA level depending which is lower. Tenants are given the opportunity to purchase their property at year 5, 10, 15 or 20 and are eligible for a 10% gifted deposit from Rentplus to aid their mortgage application. The tenants’ monthly rent includes service charges, and with no maintenance responsibilities, occupants have time to save for a deposit and build a credit history that will support their mortgage applications.
Richard Connolly, CEO at Rentplus, comments: “Rentplus was set up to help hardworking people, who couldn’t otherwise get on to the property ladder, own their own home. Our model also increases the number of affordable homes in an area, freeing up local authority waiting lists and housing budgets. With such a severe shortage of homes, it is vital that we look at new housing solutions to help hard working families like the Rafiq’s. Our model shows that through greater collaboration, we can bring more homes to the market and extend the opportunity of homeownership to more people than ever before. ”
Palmerston Heights is home to 19 brand new two, three and four bedroom Rentplus homes built by Persimmon in partnership with local housing association Tamar Housing and Plymouth City Council. All properties are specified to the highest standards and include stylish kitchens, bathrooms and private gardens. Around 30% of the Palmerston Heights homes were allocated to households currently living in social housing which freed up much needed homes for families in priority housing need.
Rentplus have a pipeline of over 8,500 homes across the country, we currently have two active sites in Plymouth and have completed homes at Lechlade, Gloucester, Sherbourne and Palmerston Heights Plymouth.