Once constructed the two and three bedroom homes at Doddington Grange will be made available to local people and managed by KSHS. This development is the first step in Rentplus’ plans for Cambridgeshire. The innovative businesses is proactively developing opportunities to work with local authorities, developers and housing associations across the region to fulfil its target of building 1,000 affordable rent-to-buy homes there by 2020.
In May, residents in Cambridgeshire and Peterborough elected their first Mayor unlocking millions of pounds worth of investment in the region’s economy from central government. The devolution deal means the new Mayor, James Palmer, has expansive powers which include setting local priorities for housing; he has already committed to accelerate delivery of 100,000 new homes across the Combined Authority in his 100 Day Plan. With research by the National Housing Federation showing that house prices are over 10 times the average salary in the region, it is good news that the Combined Authority will receive £170m to deliver new homes over five years including affordable housing, of which £70m is earmarked to boost housing supply in Cambridge.
Richard Connolly, Rentplus CEO, commented: “The housing crisis is particularly acute in Cambridgeshire and it is great to see the new Mayor’s commitment to alleviating it and supporting more local people on to the housing ladder. Reaching an agreement on this site is the first step in our plan to support his work as we intend to deliver 1,000 affordable rent-to-buy homes in the region by 2020. We are proud to be working with both Larkfleet and King Street on this development and are actively progressingmore opportunities with housebuilders to fulfil our ambitions in the area.”
Rentplus has completed affordable rent-to-buy homes at a number of sites around the country including Plymouth, Oxfordshire, South Hams, West Dorset and the Cotswolds with plans to develop many more over the coming year. Construction has already commenced on site in Doddington and the first rent-to-buy homes are expected to be available from January 2018.
Craig Glasper, KSHS Chief Executive, said: “
“We are delighted to get our first Rentplus affordable rent to buy scheme underway in Cambridgeshire. The Rentplus model is exactly the sort of innovative thinking we need in the area to enable local people toput down roots in their communities and retain key workers. We plan that this will be the first of many such announcements as part of our partnership with Rentplus to provide more affordable rent to buy homes.”
The Rentplus affordable rent-to-buy model enables those that are unable to save for a deposit a route into homeownership. In Cambridgeshire this includes key workers – teachers, nurses and care staff – who are being priced out by workers in other sectors. Rentplus’ model offers tenants an affordable intermediate rent – at least 20% less than the market rent in the area including service charges – and the ability to purchase their home in 5, 10, 15 or 20 years which gives tenants time to save to buy. Rentplus, which is funded by institutional investors and therefore requires no grant or public subsidy to deliver the affordable rent to buy homes, provides tenants with a 10% gifted deposit towards their deposit when they buy their homes.
Rentplus has completed affordable rent-to-buy homes at a number of sites around the country including Plymouth, Oxfordshire, South Hams, West Dorset and the Cotswolds with plans to develop many more over the coming year. Construction has already commenced on site in Doddington and the first rent-to-buy homes are expected to be available from January 2018.
The National Housing Federation’s Home Truths report earlier this year revealed that house prices across Northamptonshire are eight times the region’s average salary of £26,936 per annum. The research also showed that a household would need an income of £49,365 to afford a standard mortgage in the region. This underscores the fact that, for many families in the area, homeownership will remain a pipedream unless innovative new models like affordable rent-to-buy are made available.
Rentplus is already in discussions with a number of local authorities and developers across the region to identify sites for delivering volume of this innovative affordable housing tenures; the partnership with Wellingborough Homes is a significant step forward in making this a reality. Areas they are targeting include Northampton, Wellingborough, as well as nearby Milton Keynes and Bedfordshire
Richard Connolly, Rentplus CEO, said: “Our new partnership with Wellingborough Homes will form the foundation of our ambitious plans for Northamptonshire. These much needed new homes will make a vital contribution to helping the area’s working families onto an affordable pathway to homeownership.
“The affordability of housing is an issue across the country, but the Home Truths report shows just how hard it is for working families to get on the ladder in Northamptonshire. Rent-to-buy is an innovative model that gives people the opportunity to fulfil their dreams of homeownership while offering them the safety and security of a long-term tenure. We look forward to working with Wellingborough Homes to make more of these dreams a reality in the region.”
Jo Savage, Wellingborough Homes Chief Executive, said: “We are delighted to be working with Rentplus to deliver Northamptonshire’s first affordable rent-to-buy homes. At Wellingborough Homes we are committed to exploring innovative tenure models which offer a range of housing options to meet localpeople’s housing needs and aspirations. Our new partnership with Rentplus to manage their affordable rent-to-buy homes fits exactly with this ambition. We’re very pleased that we will be the first housing association in Northamptonshire to be offering this innovative housing option and look forward to working with Rentplus to deliver many affordable rent-to-buy homes across the county.”
Rentplus’ affordable rent-to-buy model offers an accessible route to homeownership for ordinary working people who are unable to save for a deposit or access other forms of affordable home ownership.
Rentplus tenants pay an affordable intermediate rent and have the opportunity to purchase their home in 5, 10, 15 or 20 years with a 10% gifted deposit from Rentplus. The rental period gives Rentplus tenants time to save and then buy their home. Rentplus is funded by institutional investors, providing affordable rent-to-buy homes with no grant or public subsidy; its properties are managed by local housing associations, like Wellingborough Homes, with 20-year operating leases.
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.
The event enabled the new residents of Flanders Close to meet their neighbours and celebrate the completion of their new homes, and included speeches from the Mayor of Bicester, Councillor Les Sibley, Councillor John Donaldson, Lead member for Housing (Cherwell DC), Chris Holley, HCHA CEO and Richard Connolly, Rentplus CEO, as well as a ribbon cutting ceremony to formally mark the occasion.
The ten newly built two bedroom homes were constructed by premier regional developer, Mulberry Developments, and forms part of the 125 unit Stratton Park development.
Through Rentplus’ unique model, the new tenants will have the opportunity to rent their homes at a below market affordable rent and save to buy their new homes in 5, 10, 15 or 20 years. When it comes to buy their home, Rentplus will gift them a 10% deposit to assist them with their purchase.
Zoe Blomer is one of the new tenants who moved in with her partner and four month old baby. Zoe said: “Before moving into our new Rentplus home we were living in a two bedroom bungalow with my partner’s father. With so many of us in the house it was getting way too cramped and we really wanted a space of our own. To date, we’ve just not been able to afford getting onto the property ladder in the traditional way.
“I first heard about Rentplus and their rent-to-buy homes through the council. As well as being affordable, the location really attracted me– it is so close to town and we have good schools right on our doorstep, which means that we won’t have to rely on public transport.
“We are aiming to buy our new home after 5 years. The affordable rent means that we are able to save at the same time so we will be able to put more towards the deposit than the 10% Rentplus will give us then.
Richard Connolly, Rentplus CEO, said: “We are thrilled to be able to help Zoe and her family, and other families just like them, and are therefore delighted to be working with Cherwell District Council to bring more affordable housing to the local community. Rentplus has been set up to create opportunities for people on low incomes with little prospect of accessing affordable rented homes let alone to buy a home, to get a first step on the property ladder. This is why it’s so exciting to see this first development in Bicester – hopefully the first of many – as average house prices here are otherwise significantly beyond the reach of many hard working people.
“Our innovative model gives people who are just about managing the opportunity to fulfil their dreams of homeownership while offering them the safety and security of long term tenure and an affordable rent.
“The success of schemes like this will allow us to expand our presence in Bicester, delivering more affordable homes for people like Zoe and her family.”
Chris Holley, HCHA Chief Executive, said: “It is great to see the collaboration between Cherwell District Council, HCHA and Rentplus come to fruition. These new affordable homes will support working families in Bicester who aspire to own their own home but cannot currently do so. It was great to take time to welcome the new tenants to their new homes and celebrate taking their first crucial steps onto the property ladder.”
Rentplus see Oxfordshire as a target area for growth, and through the opening of the Flanders Close development hope to demonstrate how rent-to-buy homes have complemented Cherwell District Council’s strategic housing plans.
Find out more here by visiting the Cornerstone wesbite: http://www.cornerstonehousing.net/news/exciting-new-‘rent-buy’-homes-coming-soon
Outside of Phase 1 houses which are due for completion in 4 weeks
Thousands of tenants are finding themselves in situations which force them to borrow money off friends or family – or worse, take on eye-watering levels of debt after borrowing from payday lenders.
Shelter has also reported that 75% of all tenants are unable to save more than £100 per month towards a deposit.
Both of these findings are shocking, and exemplify an affordable housing market which has reached boiling point. It’s no wonder that first-time buyers face an average wait of 13 years to save for a deposit, and for growing numbers, owning a house is simply unachievable.
Growing unaffordability is nothing new. A recent Resolution Foundation survey found that millennials will spend £44,000 more on rent than their parents did by age 30. However, to reach a situation where hard working families are at risk of racking up enormous debt just to rent a home is simply unacceptable.
It is high time that the Government considers the role in which the private sector can play. The bottom line is we need more affordable homes, and the Government should be exploring every avenue possible to increase numbers, and to relieve pressure on overstretched and underfunded local authorities.
In the run up to the General Election, it is an opportune time to call for change. Clearly tried and tested policies continuously recycled by previous Governments are not working. I urge whichever party (or parties) who form the next Government to seriously consider policy which supports innovative housebuilding models which actually deliver, such as privately funded rent-to-buy.
Tenants in our Rentplus homes benefit from affordable 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.
Now at a time when tenants cannot even afford their rent, let along save for a deposit and stamp duty, it is truly time for a Government to take innovative and bold action.
Richard Connolly, CEO of Rentplus
The properties will be bought to the area by Rentplus, an innovative provider of rent-to-buy homes, and Tamar Housing, a leading housing association in the South West. The six new properties comprise of four two bedroom homes and two one bedroom flats and are part of Tamar & Provincial Properties’ Langdon View development where a further 20 homes will be available for private sale.
The South Hams is significantly affected by housing affordability evidenced by the National Housing Federation’s recent Home Truths report which identified that house prices are 14.3 times the average wage in the area. This impacts on the opportunities for local people to take the first step onto the housing ladder and for employers to retain and attract talent.
The Rentplus’ rent-to-buy model has been developed to help address this issue. With Rentplus, tenants pay an affordable intermediate rent which is 80% of the market rent in the local area (including service charges), they then have the opportunity to purchase their home after 5, 10, 15 or 20 years. While they rent, tenants have no maintenance responsibilities, which means they have time to save for a deposit and build a credit history that will support their mortgage application. The tenants also receive a 10 per cent gifted deposit from Rentplus when they buy their home.
Richard Connolly, Rentplus CEO, said: “We are very excited to be announcing our first rent-to-buy homes in the South Hams. Working with South Hams District Council we hope to give many more local families and working people the opportunity to fulfil their dreams of homeownership. Our model offers them the safety and security of a long-term tenure, an affordable rent, saving pathway and ultimately the chance to own a home in an area where they have already put down roots.”
“The Government’s recent Housing White Paper recognises the important role that affordable rent-to-buy and innovative housing solutions play in delivering the right homes in the right places. This first scheme will ensure Wembury remains attractive for people to live, work and invest in their local communities. We also have ambitions for further Rentplus homes across the South Hams.”
Julie Barnett, Chief Executive, Tamar Housing, said: “The gap between wages and house prices in the South Hams is just one example of the struggles families across the South West experience to get on the property ladder. Many want to own their own home, but all too often find themselves stuck in the private rental sector where they have no hope of saving for a deposit. These new rent-to-buy homes in Wembury will offer people an affordable rent, the chance to save money and the opportunity to purchase their new home in the future. We look forward to working with both Rentplus and Tamar & Provincial Properties to expand the model’s use to fit the region’s needs.”
Rentplus currently has tenanted homes in Plymouth, West Dorset, and the Cotswolds, in addition to planned new developments in Oxfordshire, Somerset, Cambridgeshire, Northamptonshire and across Devon, with many more over this year across the UK.
The rent-to-buy homes in Wembury will be available in April 2017 and information on how to apply for them can be found at www.tamarhs.org/rentplusapp.
According to the National Housing Federation’s latest study, How affordable is housing for people in lower-income occupations?, since 2002 house prices in England have more than doubled, however, average salaries have only increased by 38% during the same period. The problem is further compounded by the fact that in some regions, like London and the South East, rent can today take up over half a worker’s salary.
The chances for these people being able to save the tens of thousands of pounds required for a deposit is virtually nil. This means that a whole swathe of people are essentially permanently priced out of homeownership – unless of course they receive a windfall inheritance. The problem is further compounded by the fact that the average rent is more expensive than the average mortgage repayment in nearly half of the UK’s cities. To keep our health services and education provision running we need to be inventive and find a way of housing the people who make them tick.
The Housing White Paper signalled a fundamental break with the past in its tacit admission that single ownership is not a panacea and will not deliver the volume of housing people need. Ultimately we need a variety of tenures that over time will enable people to make the jump to the next rung on the housing ladder. Part of the solution is expanding affordable private rent-to-buy housing, which is the model Rentplus is already delivering across the country.
Rent-to-buy enables people to rent at an affordable rate – our model offers at least a 20% discount to market – while being able to back themselves that they will eventually be able to afford to purchase their home. Additionally we incentivise tenants to save to buy their property by offering them a gifted deposit of 10% of their home’s value when they go to purchase it after 5, 10, 15 or 20 years.
If local authorities are serious about retaining key workers and offering them an affordable pathway to homeownership then we believe rent-to-buy should be the first model of housing they look to. Not only does it offer them a way of keeping their public services staffed, but it also will allow them to develop stable communities that residents have a long-term stake in.
We have spent many years getting our rent-to-buy model right and now we are on the ground delivering our homes across the country. However, we understand that – as with all new ideas – proof of concept is important, as is an evidence base to demonstrate Rentplus’ contribution to meeting local housing need. In light of this, we are building up a strong evidence base to demonstrate how our homes best meet local housing need, as well as finding out where our Rentplus tenants have moved from so we can better understand the wider impact of Rentplus on the housing market. The results of the research conducted by Tamar Housing of our tenants at Palmerston Heights, Plymouth is fascinating. Over a third of the occupants were previously living in social housing prior to moving in to their new Rentplus homes. This means that these homes have been released for the local authority to house people in housing need. A further third of our Rentplus tenants have been housed from the housing waiting list.
Although it is still early days, this data indicates that the Rentplus model offers a win-win for everyone. Not only are we providing affordable homes for those who are looking for an affordable opportunity to get on the housing ladder, but it has the additional benefit of freeing up scarce affordable and social housing for people in housing need. On the basis of this evidence, we strongly believe that embracing affordable rent-to-buy will go some way to helping relieve the pressure on local authority housing waiting lists and making best use of affordable housing.
The proof really is in the pudding. The UK needs to recognise that there is more than one path to home ownership and creative solutions are required to solve the housing crisis. This early data exemplifies that affordable rent-to-buy models really do help those shut out of the housing market and puts them in the best position to own a home of their own whilst making a positive contribution to the wider housing issues that local authorities currently face.
Richard Connolly is CEO Rentplus.