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The Department of Communities and Local Government (DCLG) has released its latest English Housing Survey – data which throws into stark relief the nature and extent of the housing crisis in the UK. This research found that there are now 300,000 fewer first-time buyers today than in 1994/1995. The average age of those who can afford to buy also increased in this time frame, from 30 to 33 years of age. These shocking results, combined with the shortage of homes being built – David Cameron built the fewest homes of any Prime Minister since 1923, with an average of just 123,560 homes per year, – means that housing should still be a serious concern for the Government.
Affordability remains a serious issue and without additional support or policy changes we are left in a situation where only high earners, or those with a generous supply of credit from the ‘Bank of Mum and Dad’, are able to afford to buy their own home. For those less fortunate, saving up for a deposit is an incredible challenge. Research from Resolution Foundation has found that those under 35 will pay £44,000 more in rent during their lifetimes than previous generations. Millennials (those currently aged 15-35) may also be the first generation to earn less than their parents. With rents and house prices rising far faster than wages, many will be struggling to stay where they are, with only the dream of owning their own home. All this means that we have seen a decline in the number of private renters who expect to buy their home, after a relative period of stability.
Theresa May’s new government considers helping young people onto the housing ladder to be a top priority. However, the Government must realise that their Stater Home policy will not help enough people. The struggle to save for a deposit and pay full rent simultaneously is too difficult for many aspiring home owners. Saving for a deposit remains the biggest barrier to home ownership and two thirds of tenants questioned for the English Housing Survey who said home ownership is out of reach, cited saving for a deposit as the main barrier. Affordable models, like Rentplus, are therefore a vital piece of the housing puzzle, as they help people who would otherwise by excluded from home ownership, and are complementary to other affordable options already offered by housing associations.
Tenants in Rentplus homes benefit from affordable intermediate rents (80% of market rent); a 10% gifted deposit when they are able to buy and have the additional benefit of no maintenance responsibilities whilst they are renting their home, as during this time our housing association partners who manage the homes takes care of that on our behalf. Of course, Rentplus is not a panacea; it is a complementary housing tenure which provides an alternative route to home ownership, but it is our belief that there is no one size fits all solution, and instead many are required to suit the needs and circumstances of the UK population at large. It is time to be innovative and brave.
Richard Connolly, Rentplus CEO