Key workers, who already find it tough to get on the housing ladder despite shared ownership and similar schemes, are finding things even tougher with three in 10 (29%) of these who rent saying it’s become less achievable as a result of the global pandemic.
With house prices rising 3.4% over the year to June 2020*, mortgage lenders pulling their high LTV deals**, and the stamp duty holiday only serving those more affluent buyers***, key workers have been hit with a toxic triple whammy as they try to take their first step onto the housing ladder. Nurses have been hit particularly hard, as one of the groups left out of the recent pay rises announced by the government back in the summer.
The research also found that over a third (38%) of all NHS and key workers say they have less money as a result of the pandemic, putting home ownership that bit further out of reach.
Of the challenges NHS and key workers faced when thinking about purchasing a home, saving for a deposit topped the list (29%), with their salary not being high enough (28%) and homes in their area not being affordable (25%) also ranking high.
Over four fifths (86%) of those key workers who do not own their home would like to do so, with those currently renting having done so on average for seven years.
In order to address this challengers, three quarters (75%) of the general public surveyed would support initiatives which provide extra support, with 25% saying the public sector should pay, 9% the private sector, with half (53%) saying it should be a mix of private and public.
In response to the findings, Steve Collins, Rentplus Chief Executive Officer, said:
“Beyond the headlines of a “housing boom”, there lies a divided housing market, where those on lower incomes are increasingly shut out and struggling to get on the property ladder.”
“Many of these people are keyworkers; our nurses, care assistants and supermarket workers who continue to serve on the frontline during this pandemic and who want the chance to own their own home. With eye watering house prices and rising private rents, it is virtually impossible to save for a deposit, and with that the possibility of home ownership moves further away. That’s why we gift a 10 per cent deposit to help overcome what is for some, an insurmountable hurdle.
“Although proposed solutions to the UK’s housing problem have been piloted they have failed to gain real traction and, in some cases, made the situation worse. There is a real need to increase the use of creative approaches if we are to make any progress at real scale and give our valued keyworkers the opportunity to own their own home.”
Qualified NHS nurse, Nicole Richards, 27, from Northampton was one of the many key workers who found it impossible to save for a housing deposit, due to expensive private rented accommodation and essential outgoings.
Nevertheless, Nicole was finally able to circumvent the “deposit barrier” after moving into one of Rentplus’ unique homes in May 2017. She is now paying a reduced rent on a new build home and saving for a deposit to buy the property. In five years, Rentplus will also gift 10% of the sale price towards her deposit.
Rentplus’ unique affordable rent-to-buy proposition offers those on lower or middle incomes, without savings, the chance to rent a property for between five and 20 years. During this time, they can save towards a deposit, and build a good credit rating which will allow them to get a mortgage when they decide to buy. A majority of its tenants are key workers.
Commenting on her new home, Nicole said:
“I’d been renting for about six years and I have never been able to save as much as I am now. Rentplus is a fantastic opportunity to help people such as myself to save to purchase their first home and I am so grateful to find this opportunity”.
The research was conducted by Opinium Research between 28 August and 2 September among 2,000 UK adults and 500 NHS/key workers.
*https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/housepriceindex/june2020
**https://www.mortgagesolutions.co.uk/news/2020/09/07/more-than-1000-high-ltv-mortgages-pulled-from-market-in-six-months-moneyfacts/
***https://www.ft.com/content/88d1274f-e414-4444-9bc7-d7c97c5cfb26
“The lower prices of First Homes will make home ownership more accessible but, significantly, the scheme will still require a deposit of £14,000 on average as a minimum – we know that for many key workers and families on lower incomes this is a virtually impossible ask.
“Affordable rent-to-buy buy schemes like Rentplus offer the prospect of home ownership without the worry of saving for a deposit. We have received legal advice recently which reconfirmed that Rentplus falls within both the term “affordable rented” and “rent to buy” of the National Planning Policy Framework definition.
“First Homes can undoubtedly play a role in helping people to become homeowners, but there must still be other routes to home ownership for those who First Homes will miss off, those for whom raising a sizeable enough deposit is still not achievable.”
Rentplus CEO Steve Collins
You can read the full report here
Priya joins Rentplus from Lovell Partnerships Ltd where she was Partnerships Manager: her successes included obtaining, maximising and securing s106 and grant funded affordable housing offers from Housing Associations.
She joins a growing team at Rentplus, including Area Managers across England. Her new role will be to introduce Rentplus and establish and strengthen relationships with Local Authorities, Housing Associations, Land Agents and other social housing stakeholders and deliver affordable rent to buy to families across the Midlands.
“I am delighted to join the Rentplus team and I am looking forward to working with a range of clients across the Midlands to expand affordable rent to buy into the region to give our key and essential workers, and other hard working but lower income people, the chance to move from being renters to homeowners,” Priya said.
Chief Executive, Steve Collins, has welcomed Priya’s appointment: “Rentplus believes that every family dreaming of owning their home should have the opportunity to do so.
“Priya brings a wealth of knowledge, experience and transferrable skills that will make turning renters into homeowners a reality for families across the Midlands.
“Rentplus has already provided affordable rent to buy homes for key and essential workers and other families in Northampton and across the south of England and we are looking to make homeownership a reality in every county in the country. “
Rentplus, the affordable rent to buy provider, has seen its pipeline increase by a third in the last six months as it looks to meet the growing demand for affordable housing. In a time when it has become clear that the UK needs to do more to look after our key workers, Rentplus has adapted its business model to support local authorities and ensure better provision of homes for key workers and others who struggle to get on the property ladder due to high deposits. This group makes up 57% of its affordable rent to buy tenants.
The company utilised the slow property market conditions earlier in the year brought on by lockdown to scale up its homes pipeline. Rentplus has had offers accepted by a range of property developers on additional units which were originally earmarked for private sales. The company is also in discussions with housing associations to help deliver additional units which do not required grant funding from Government. This helps address the issue the affordable housing sector has experienced as housing associations across the country look to reconsider their development pipelines to preserve cash and protect themselves against loss of income brought about by the coronavirus pandemic.
Rentplus has now had offers accepted or completed on nearly 1,200 units for its rent to buy portfolio, which will be offered to tenants on affordable rental agreements, giving them the opportunity to purchase in 5,10, 15 or 20 years. It has another 7,100+ units in its sights, including a significant number originally earmarked for private sales. The total Rentplus pipeline is now over 18,000 homes.
Rentplus’ model is centred on partnering with Housing Associations to find and secure suitable tenants from council waiting lists leases. Leases are long terms and the tenant has an opportunity to buy the property at 5,10, or 15 years. Paying affordable rent (discounted to 80% of comparable private rents locally) means that the tenant can immediately start saving towards their deposit to buy the home they are living in. At the point of purchase, Rentplus uniquely gifts the tenant a 10% cash sum towards their deposit, thus removing the largest barrier to home ownership
Steve Collins, Rentplus Chief Executive Officer said:
“During lockdown, at a time when housing associations thought they would have to halt the purchase of land and new-build homes, and housing developers were unable to realise sales, we saw an opportunity to take on further sites by adapting our business model. This has not only enabled us to accelerate the growth of our pipeline by over a third, but also enables us to ensure the provision of housing for key and front line workers – the very people who were keeping the country afloat during lockdown.”
Historically Rentplus only acquired properties from developers under the section 106 agreement. Over the last six months the company has agreed to acquire units on the free market from smaller property developers looking for ways to release returns from their developments.
Planning reform must not come at the expense of those on lower incomes, says Rentplus. Planning reform must not come at the expense of those on lower incomes, says Rentplus. Planning reform must not come at the expense of those on lower incomes, says Rentplus.
Originally called Prince Philip Barracks and used as a training base for the British Army, Dukes Quarter is part of one of the largest regeneration projects in the country. There are 3,350 new homes planned, alongside new infrastructure including schools, a health hub, new employment opportunities, shops, a cinema, leisure centre, and 150 acres of green space. The site’s heritage will be celebrated, with many of the garrison’s landmark buildings being restored and integrated into it.
This phase of the development will comprise 190 new homes, of which 73 Rentplus properties are for offer through its unique rent to buy proposition.
Rentplus’ no deposit, affordable rent-to-buy model offers an accessible route to homeownership for ordinary working people unable to save for a deposit or access other forms of affordable home ownership defined by the National Planning Policy Framework, including shared ownership, which requires a substantial deposit.
The project sees a new partnership between Rentplus, the leading provider of affordable rent-to-buy homes, and Winchester Housing Trust, who will manage the units for Rentplus.
The new partnership offers an affordable pathway to homeownership for working families on low or middle incomes. It benefits those unable to save the large deposits required to access other types of housing, with many of the first tenants expected to be key workers.
Residents can move into a brand new home without having to pay an initial deposit, and pay an affordable rent for the duration of their lease. Leases run for a minimum of 5 years and up to 20 years, giving residents time to clear debts and save towards a deposit. At year 5 and at key points during their lease, residents have the opportunity to purchase the property: at this point, Rentplus will gift them 10% of the purchase price towards their deposit.
The scheme is the first time that Rentplus is working with East Hampshire District Council and national house builder Taylor Wimpey. For Rentplus, the partnership marks another big step in the journey to deliver its award-winning affordable rent-to-buy homes in every English county.
Rentplus is funded by institutional investors, providing affordable rent-to-buy homes with no grant or public subsidy. Properties are managed by local housing associations, like Winchester Housing Trust, with 20-year operating leases. Our partners benefit from having an extended tenure offer and increased rental income from the homes.
Applicants should be registered on the Hampshire Home Choice scheme to stand the best chance of being allocated a Rentplus home. Applicants should be in full time employment and a financial assessment will be carried out before ascertaining whether an applicant will be appropriate for a 5, 10, 15 or 20 year purchase plan. One of the benefits to Rentplus is that poor historic credit is by no means a barrier to acceptance as tenants have a minimum of five years to be able to rebuild their credit history.
Steve Collins, CEO at Rentplus commented: “This is exciting for key workers or those others on lower or middle incomes in Hampshire, unable to save a deposit, to get onto the housing ladder.
“Raising a deposit has become the biggest barrier to home ownership – even a 5% deposit is beyond the realms of possibility for those people in society we have come to rely on – our NHS workers, our teachers, our emergency service personnel. Unless they have access to the bank of mum and dad, if they are renting privately, they are unlikely to be able to scrape together the £15,000-£30,000 demanded by high street lenders.
“Moving into a brand new home without paying a deposit, paying affordable rent for five years plus is a real opportunity to save, build a good credit rating and begin to engage with the community. Being gifted 10% of the sale price towards the deposit when they’re ready to buy is an added benefit and incentive.
“We’re very excited to see this offered in Hampshire. We’re determined to make this available across every county in the country.”
Andrew Simpson from Winchester Housing Trust added: “This is our first project with Rentplus and we are delighted to be able to offer this unique route to homeownership.
“Not only will it help the Trust to grow by extending the tenure of properties we offer, but we are now part of an unique nationwide offer, which is going to benefit our key workers and others less able to raise the deposit but able to afford the rent and mortgage.”
James Child, Project Lead at Whitehill & Bordon Regeneration Company, said: “We want to ensure that the delivery of new housing for local people and those moving to the town includes a range of different tenures and price points. Sustainable housing is being built across the town for private sale and affordable housing, including social rent, shared ownership and Rentplus. Giving people the ability to rent their home with the option to buy is incredibly important and we’re pleased this agreement with Rentplus is in place.”
Cllr Richard Millard, Leader of East Hampshire District Council, said: “The delivery of homes in Whitehill & Bordon is an integral part of how we are transforming the town and bringing the infrastructure needed to make it a green, healthy and connected town.
“I am delighted to see these new properties made available through the Rentplus scheme which will make them more affordable and more accessible to our new residents.”
Mary O’Brien, Sales and Marketing Director at Taylor Wimpey South Thames, said: “Dukes Quarter is a fantastic place to call home and we’re delighted to be working with Rentplus to open up opportunities for more people to join this brand new community.”
The Rentplus homes comprise:
1 bed flats
2 bed flats
2 bed houses
3 bed houses
Residents should be able to start to take occupation in this phase of the development in late December 2020/Spring 2021, with all tenants moving into their new homes by Spring 2022.
Residents move in to their home without the need for a penny in deposit, and rent before being offered the chance to buy. They rent for a minimum period of 5 years, paying rent to a registered provider or housing association. All the repair costs for the home is included in the rent.
When they decide to buy the home they are living in, they are gifted 10% of the sale price from Rentplus to put towards their deposit.
Rentplus is the leading provider of affordable rent-to-buy homes in the country and winner of the National Housing Awards’ Most Innovative Home Ownership Solution.
What is being offered
Rentplus is offering 41 affordable rent to buy apartments in Eagle House, Bracknell, located within the Lexicon, Bracknell’s brand new multi-million pound leisure development. The properties are in the heart of Bracknell with excellent commuter links to London.
The developer of the scheme is Thomas Homes Limited – a leading developer across the South of England.
The apartments have been fully converted and refurbished and is a mixture of tenures, including affordable rent to buy. The block consists of 84 units in total: 43 flats have already sold within the block, and Rentplus is offering 41 x 1 and 2 bed flats for affordable rent to buy homes.
How do applicants apply for Eagle House
Applicants must be working and have aspirations to buy their own home within a 5, 10, 15 or 20 year period. As agreed with the local authorities, priority will be given to those who can demonstrate a local connection to the area.
A financial assessment will be carried out before ascertaining whether an applicant will be appropriate for a 5, 10, 15 or 20 year purchase plan. One of the benefits to Rentplus is that poor historic credit is by no means a barrier to acceptance as tenants have a minimum of five years to be able to rebuild their credit history.
Applicants should contact us to register interest and arrange a site visit over the next few weeks.
Booking a site visit with Covid19 restrictions.
Our main priority continues to be the safety and wellbeing of our employees and prospective residents, and we have strict social distancing procedures in place.
There is a system for pre-booked appointments for people who want to visit the site and you will need to contact us to register your interest and arrange a site visit over the next few weeks.
You can read about Rentplus residents who have benefitted from no deposit, affordable rent to buy schemes here https://rentplus-uk.com/about/case-studies
Data will be held in compliance with GDPR requirements and will be shared with relevant housing association partners with permissions.
This support not only includes its award winning affordable rent to buy option (where it buys brand new homes to lease to housing associations), but also buying market housing units to provide a private rented option for family homes for councils and RPs to offer those on the waiting list.
The company is also working with house builders, buying unsold units on sites, providing developers with a rapid exit strategy and cash to encourage the building of more social housing.
Given the unprecedented events surrounding Coronavirus, councils and housing associations have struggled to continue to invest in social housing. Investment from Rentplus provides its partners with increased rental income and growth, without the need to borrow.
Chief Executive, Steve Collins, explains: “We’ve established ourselves as a trusted partner with local authorities and RPs across the country. Rentplus is fully NPPF-compliant and enjoys cross-party support, making it easier for local authorities to adopt our offer.
“It’s our ambition to make affordable rent to buy available for our Key and Essential workers and all low/middle income earners – the people Homes for Heroes is aimed at. This group is priced out of all home ownership products, including shared ownership and Help to Buy, because of the deposit demands.
Our tenure blind affordable rent to buy homes are hugely popular with Key Workers who make up the majority of Rentplus residents. They contribute so much to the local economy and to our wellbeing; they want to own their own home close to work, but cannot save the deposits. We’re making homeowership a reality for this group.
“We are privately funded, but driven by social outcomes: we work with carefully chosen partners to build homes in areas to improve local area diversity.
“We’re also working to help councils review their local plans and ensure they are NPPF compliant ahead of the Planning for the Future’ document requires all councils to have an up to date local plan in place by December 2023.
Rentplus can help free up social housing, by moving qualifying aspirant home owners from social housing or waiting lists into affordable rent to buy homes. In some areas up to 50% of Rentplus’ tenants have moved from social housing to a Rentplus home, freeing units up for reallocating to families in greater need.
Rentplus has significant institutional funds to invest now. It won the NHA Most Innovative Home Ownership Solution 2019, is a finalist for the second time in this year’s UK Housing Awards, and in this year’s RESI, and Planning awards.
Rentplus offering more support to councils to develop Homes for Heroes Rentplus offering more support to councils to develop Homes for Heroes Rentplus offering more support to councils to develop Homes for Heroes Rentplus offering more support to councils to develop Homes for Heroes Rentplus offering more support to councils to develop Homes for Heroes