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Rentplus, the innovative provider of rent-to-buy homes, is urging all of the main political parties to put aspirant home buyers at the heart of their manifestos and back privately funded, affordable housingtenures such as rent to buy which solve the issue of high deposits required for homeownership.
The firm, which has met with 130 potential funders so far, has already raised £110 million of funding from the City to progress its innovative affordable housing model. It says that a further £40 billion of investment is potentially up for grabs if the Government would lend its support to broadening affordable housing models and tenures.
Saving for a deposit while renting continues to be the biggest obstacle to home ownership. More than two thirds of people cited this issue as the primary challenge to buying their home in the Building Societies Association’s Property Tracker. A recent report from Shelter meanwhile found that 75% of renters are unable to save more than £100 per month towards a deposit. It is no wonder then that first time buyers now face an average wait of 13 years to save for a deposit for a house in England and Wales.
Rentplus’ privately funded, affordable rent-to-buy housing tenure addresses both the key issue of deposits as well as ever increasing market rents. The firm offers aspirant home owners an affordable opportunity to purchase their own home through a combination of affordable rents and a 10% gifted deposit. The Rentplus rent-to-buy model offers five year tenancies at an affordable intermediate rent, set at 80% of market rent, with the majority renewable on a 5, 10, 15 and 20 year basis. At the end of their rental agreements, tenants are given the opportunity to purchase their property and are eligible for a 10% gifted deposit from Rentplus to aid their mortgage application.
Richard Connolly, CEO at Rentplus, comments: “It is high time that we seriously consider the role which the private sector is able to play in the provision of affordable rent-to-buy housing. As the sixth richest country in the world we can and must do more to ensure that the correct policies are in place to offer truly affordable housing to more people. In the lead up to the General Election, we are calling on the next Government to lend its support to innovative housebuilding models like rent to buy that actually deliver, regardless of whether they are publically or privately funded.
“Attractive to private investors at scale, our rent-to-buy model has the capacity to deliver new homes today without any reliance on public money. In 2015/16, fewer than 3,000 homes were built for affordable home ownership, but attracting private investment to the sector can provide the capital to build and deliver now.”
The Rentplus affordable housing tenure is attracting significant demand on developments where it is in place, with a recent site in Plymouth receiving 275 applications for just one Rentplus home. The company aims to build a minimum of 5,000 homes across England by 2020 and currently has a pipeline of 10,000. Where Rentplus has already developed, over 60% of tenants have come from local housing waiting lists, with 35% moving out of existing social housing. As well as building new homes, the scheme therefore also frees up social housing for those most in need.
Rentplus brings together local authorities, national, regional and local housebuilders, developers and housing associations in an alliance to build new affordable homes and tackle the nation’s housing crisis.