Ahead of the budget later this month, Rentplus is calling on the government to encourage local authorities to back privately funded models of affordable housing that can inject additional funding to deliver new homes at no cost to the public. This complements existing initiatives to increase access to home ownership and supports the government to meet its target of 300,000 new homes a year.
In the 1990s it took the average young family three years to save for a reasonable sized deposit. Today, it would take the same family 19 years to accrue the amount they need. It has been reported that in 2017, low-income families had just £95 of savings and investments, excluding pensions, compared with £136 in the same period a year earlier. First-time buyer deposits have risen to a record high of £33,339 from £17,740 in 2007.
This week, the Secretary of State for Housing said: "Everyone deserves a decent, affordable and secure place to call home. When a generation is locked out of the housing market it hurts us as a country”. He went on to say that he wants to see “a Britain where ‘Generation Rent’ can become ‘Generation Own’. A Britain where we turn the vision of a place you call home into a reality.”
Steve Collins, chief executive of affordable rent to buy provider, Rentplus, said: “What the Secretary of State has just described is our very ethos”.
He believes that affordable rent to buy solutions are an answer to all of these scenarios and will help working families on low incomes, or with no savings or debt history to become home owners. The average household income of those using Help to Buy is £51,000 compared to Affordable Rent to Buy families’ £31,700 average income.
Rentplus works in partnership with housing associations to identify local authorities and house developers to accelerate the delivery of thousands of new affordable rent to buy homes across the country - at no cost to the public purse.
Collins added: “Einstein was right when he said that it is madness to do the same thing over and over again and expect different results. Unless the housing sector does something new and embraces market disruptors and private investment, nothing will change: thousands of people will remain locked out of achieving their ambition of owning their own home.
“We have a huge tranche of hard working lower income families, trapped and paying exorbitant private rents or locked into occupying social housing when they could be buying their own home. We desperately need to accelerate delivery and include alternative affordable housing solutions such as our affordable rent to buy proposition as part of a package of viable and practical solutions for these households.
"We know that this change in dynamic to the housing market is not the panacea to the entire housing shortage across the country but it has the potential to shorten waiting lists for local authorities - up to 60% of Rentplus’ families are on waiting lists and 35% move to affordable rent to buy homes from social housing, which allows them to be reallocated to those in greater need.
“We have £2bn of private funding poised to invest in building new homes across the country. All we need is more local authorities to commit to offering local families a rent to buy solution and sign up with us to deliver them.”
Local Authorities who want to engage with Rentplus to deliver the affordable rent to buy option to tenants should contact Steve Collins on 0330 229 0035 or email [email protected]
Notes to editors
Rentplus is the country’s leading affordable rent to buy provider, offering an innovative solution to the UK’s unaffordable housing market. The Rentplus solution is proving popular with housing associations looking to increase their stock without upfront investment. Fully funded by institutional investors.
You can read the Rentplus budget submission here.