Last week, the Secretary of State for Housing set out his response to the Queen’s Speech. In it, he defined the Rentplus ethos.
“No reasonable person in this House, or indeed across the country, can credibly make the case that we should not be building more homes, because all of us in this House aspire to be or are already homeowners, and we aspire for our own children and grandchildren to be homeowners as well.
“The property-owning democracy is one of the foundations of this country—the belief that home ownership should be achievable for all who dream of it, and that young people, irrespective of where they are born, should be able to own the keys to their own home.
“For too many, this uniquely British dream has proved to be out of reach, and we face a generational divide between those who own property and those who do not. By the age of 30, those born between 1981 and 2000 are half as likely to be homeowners as those born between 1946 and 1965.
“Too many young people are being locked out of the benefits of capitalism. As we work hard to level up the country and to bridge this home ownership divide, we must do everything we can to make home ownership accessible to even more people.”
Rentplus exists because a property developer in Plymouth realised his own family and friends – working in good jobs – could not afford to buy their own home. He teamed up with a visionary local Housing Association and approached Plymouth City Council. They proposed a new housing tenure to allow working families to get onto the housing ladder by removing the deposit barrier – the largest barrier to home ownership.
Rentplus-UK was born.
In 2016, the first Rentplus tenants moved in to a speculative Rentplus scheme with Tamar Housing (now Willow Tree Housing), drawn from the local waiting list. They moved in with zero deposit down, and paid affordable rent for 5 years. Over that time, they cleared any student loans or debts, built a strong credit rating and started to save – something they hadn’t been able to do as their previous high private rents had prevented this.
Later this summer, those tenants will buy 100% of their home, with mortgages from high street providers, helped with an additional 10% gifted sum to boost their savings.
The model is proven.
Since then, many, many more have embarked on their homeownership journey with Rentplus across England and we’re in talks to make a further 22,000 homes available for first time buyers, unable to save the huge deposits now required to get on the ladder.
Now, in 2021, Rentplus is working with councils across the country to offer affordable rent to buy and is pushing ahead to deliver the vision of having affordable rent to buy available in every county in the country.
The tenure enjoys cross party, and government support. It has won national awards for being an innovative home ownership scheme. It has a QC’s determination that nothing in planning law prevents local authorities adopting the scheme.
If you’re a forward looking Housing Association, Local Authority or a developer looking for investment in S106 housing on your site, get in touch today by calling your area manager on 0330 229 0035 or visit https://www.rentplus-uk.com/contact-us
MK based Rentplus-UK is working with Milton Keynes Council and Greenhill Housing Association to offer affordable rent to buy for the first time in Milton Keynes.
Medina House in Central Milton Keynes is an exciting development of 86 new contemporary flats for sale. It includes seven new Rentplus apartments offering the chance for people living or working in Milton Keynes to get on the housing ladder without the need for any initial deposit.
Rentplus is a national award winning rent-to-buy scheme with homes across southern England. It offers those who are working and who aspire to home ownership, the real prospect of achieving their goal of buying their own home, without the need for any initial deposit. Tenants pay a discounted rent for a minimum of 5 years (at 80% of the open market rent), giving them time to build a good credit rating, and save towards their house purchase.
By agreement, tenants may choose to extend tenancies to rent for up to 20 years but have the option to purchase 100% of their home after 5, 10, 15 or 20 years: this will be agreed at the start. When ready to purchase, tenants are given a 10% gifted deposit from Rentplus towards their deposit.
Rentplus tenants move into their home with NO deposit. Tenants pay a discounted rent for a minimum of 5 years (at 80% of the open market rent), giving them time to build a good credit rating, and save towards their house purchase.
Tenants may choose to extend tenancies to rent for up to 20 years but have the option to purchase 100% of their home after 5, 10, 15 or 20 years. When ready to purchase, tenants are given a 10% gifted deposit from Rentplus towards their deposit.
Applicants for the rent-to-buy homes must have a local connection to Milton Keynes, either by living or working in the Borough for the last 12 months or with family living in the borough for the last 2 years. They must be in employment and have aspirations to buy their own home within a 5, 10, 15 or 20- year period.
The Rentplus affordable rent to buy homes delivered last year in Mannamead, Plymouth, and developed with partners Pillar Land, Tamar Housing (now Willow Tree Housing) and Plymouth City Council has been shortlisted for Best Regeneration Project (rural and suburban) for the Inside Housing Development Awards.
The winner will be announced on 4 November 2021 and will celebrate over 130 outstanding developments and the teams and individuals behind these across the country. To find out more, visit: https://bit.ly/3eLA4FT
In partnership with Archerfield Homes and Impact Modular, we’ll be providing affordable housing for local people looking to buy their home but unable to save for a deposit. This is the first construction of modular housing to offer our award-winning affordable Rent to Buy solution.
The development in Monks Eleigh, Suffolk, will include 5 Rentplus homes. At Rentplus we pride ourselves on the sustainability of our homes which meet and often surpasses latest government guidelines, minimising their carbon footprint and therefore impact on the environment. Through Impact Modular’s “sustainable construction” process, carbon emissions are approximately 30% lower than traditional construction means.
The development will reach completion later summer 2021, with the first residents expected to move in before the autumn.
Rentplus tenants move into a brand new home with no deposit, pay affordable rent on the property for a period of 5-20 years and are offered the chance to buy at 5 year intervals. This gives them time to clear debts, and save money, and to build a strong credit rating. At the point of purchase, we gift our tenants 10% of their property price towards their deposit.
Jack Randall, Chief Commercial Officer at Impact Modular, said:
“The Government has an ambition for the UK to be Carbon Net Zero by 2050 and has set out clear guidelines to launch a Green Industrial Revolution. Friars View represents Impact’s commitment to financing forward-thinking developers like Archerfield Homes who are committed to build using sustainable construction methods on their developments.”
Steve Collins, Chief Executive at Rentplus, said:
“This initial scheme is the first in the 350+ unit development pipeline alongside Impact Modular and Archerfield and we’re very proud to be able to offer affordable rent to buy homes to local people, giving them access to homeownership without the need for a deposit.”
“Our award-winning affordable rent to buy solution gives local key workers on lower and middle incomes the chance to own their own home because we remove the deposit barrier that stops them accessing other homeownership tenures. This, and the 10% gifted sum when they buy, provides a much-needed solution for first time buyers in this difficult climate.”
In response to confirmation of a Planning Bill in the Queen’s Speech, Steve Collins, CEO of affordable housing provider Rentplus, said:
“With the introduction of the 95% deposit mortgage scheme and the stamp duty holiday, house prices have soared to unprecedented levels. Without a sufficient system of ensuring supply can keep up with demand, the current rapid inflation will further lock out those on low to middle incomes from getting a foot on the property ladder.
“Currently, out of date local plans mean councils are not accepting new applications for privately funded affordable housing schemes. We welcome the requirement for all local authorities to have up to date local plans. In order to tackle the affordability gap, it is imperative that local authorities capitalise on the opportunity to ensure more affordable housing tenures are included, including those funded privately.
“These schemes continue to play a significant role in boosting the overall number of homes particularly for first-time buyers on lower incomes, helping reduce demand for social housing by removing aspirant homeowners from waiting lists. Increasing investment from the private sector in affordable housing will be a key means by which the government can deliver on its promise to help more people to own their home.”
The Covid-19 pandemic has had a huge impact on the way we live and it’s no exaggeration to say the impact it has had on an already problematic housing market has been hugely negative.
The Chancellor’s decision to implement a stamp duty holiday, whilst well intentioned, has driven house prices up, forcing an even higher proportion of people out of the market. The Covid impact has been laid bare by the recent numbers from the Halifax showing that the average house costs £252,765 – completely out of reach for millions of people.
The irony is that those people most affected are those that we have celebrated during the pandemic: our key and essential workers.
Despite being able to afford to pay a monthly mortgage, they are unable to secure one because of the challenges in saving the huge deposit when paying high private rents. They therefore end up being trapped in a vicious circle in the rental market, unable to put aside any significant savings.
Millions of pounds have been pumped into home buying schemes by government. Despite this, many nurses, care workers and other key and essential workers remain unable to buy their own home.
We don’t believe that’s fair.
Government schemes such as shared ownership, Help to Buy and the new First Homes simply won’t plug that hole, because they fail to address one of the key barriers for this group – the need for a deposit.
We believe it is time to break that vicious circle.
We know from experience that alternatives to deposit-reliant schemes really do work. They help people that don’t have the ability to save to get on the path to home ownership.
Our own rent-to-buy scheme is helping people who’ve previously written off the prospect of buying a quality house. The first cohort who moved in to a Rentplus home five years ago, without a deposit, are on the cusp of completing on buying 100% of their home, thanks to Rentplus and a 10% gifted sum towards their deposit.
We want to be handing over many more keys to aspirant homeowners – and we’re actively looking for new developments across the country to help those who dream of it to get on the property ladder.
Our affordable Rent to Buy is by no means the only answer to the housing market problem: but alternative, innovative options such as Rentplus could go a long way in relieving the issue.
Steve Collins
CEO Rentplus-UK
Why isn’t your Housing Association offering Rentplus? We offer registered providers much needed new income streams without additional borrowing whilst widening the choice of affordable housing offered locally, helping you support Key and Essential workers who aspire to homeownership.
Rentplus was mentioned in the Guardian’s weekend supplement for First Time Buyers!
Rentplus was mentioned in the Guardian’s weekend supplement for First Time Buyers. You can read what they had to say about us here.
David Marshall, Executive Chair of Rentplus, was delighted to be invited by Anthony Gahan as the first guest on his podcast “Against the Tide”, and to discuss Rentplus as a positive disruptor in social and affordable housing.
The podcast is available to listen to on Spotify and Apple Music.
“Rentplus is an incredible business – making the dream of affordable home ownership a reality with its unique model. I have posted before on this huge societal issue which needs to be embraced by us all.” – Anthony Gahan
SHARED OWNERSHIP WILL NOT PROVIDE ALL THE ANSWERS FOR KEY WORKERS HOPING TO BUY
Steve Collins, CEO
This article first appeared in the Red Brick blog: February 2021
The Government has made the startling admission that it does not know how many people have transitioned to full ownership under its Shared Ownership model. Despite not knowing how effective it is, it is making Shared Ownership a key pillar of its “central mission” of helping more people to own their home.
Bids have opened for the next Affordable Homes Programme (AHP) and the Government has set out its expectation that the tenure will account for the “vast majority” of the home ownership homes it funds.
Whilst the proposed new Shared Ownership model will make it easier both for people to buy an initial stake and then to increase their equity in the property, for some, the uncertainty over exactly how long it will take them to fully own their home will still not suit their needs. If you buy an initial 10% stake, after 15 years of gradual staircasing at 1% you would still only own 25% of the home. Legal fees apply at each increase and if shared owners want to buy larger shares using the existing process then all fees (valuation and legal) remain their responsibility. However large their share is, tenants also have to pay 100% of service charges.
For some aspiring homeowners, this part-rent, part-own process therefore remains complicated, uncertain and unattractive. Yet with the number of mortgage deals for those with 5% deposits remaining almost non-existent, house prices continuing to increase and a partial public-sector pay freeze, key workers and those on lower incomes who cannot save for a large deposit will struggle to buy on the open market.
As we have argued before in this blog, the key to widening access to home ownership is addressing the difficulty in saving for a deposit. It is this that is blocking many renters who could afford mortgage repayments from being able to buy a home. This has been compounded by coronavirus. The Joseph Rowntree Foundation’s annual report on poverty highlights that 41% of private renters who have seen a drop in income since March have had to use their savings to make up for shortfalls in income. Savings that they might have been hoping to use for a house deposit. Many others didn’t have any savings to fall back on; over two thirds of social renters and almost half of private renters in the bottom half of the income distribution had less than £500. This also raises the question of how many social renters would be able to afford to exercise the new ‘Right to Shared Ownership’ that is a condition for all social and affordable rented homes funded under the AHP.
Rent to buy schemes do address this hurdle by not requiring any initial deposit when people move into a brand new house. They also provide a clear and defined route to full ownership with tenants buying their home outright at a set 5 yearly interval. Paying only an affordable rent enables them to save more for a deposit than if they were renting privately and at Rentplus we add to that by giving them a gifted lump sum of 10% of the value of the property when they are ready to buy.
In the meantime all repair and maintenance costs are covered by the landlord and service charges are included up until the point they become full homeowners.
Unlike the unknown effectiveness of shared ownership in helping people to fully own their home, this spring the first of Rentplus’ tenants will become 100% homeowners after just 5 years.
Whilst local authorities rightly remain concerned about providing homes for those in the greatest need, rent to buy has a positive knock-on impact. Up to two thirds of the tenants moving into affordable rent to buy properties to date had been on the local housing waiting list. In some areas up to half of tenants have moved out of existing social housing; freeing this up to be re-allocated to those most in need. Over half of all our tenants are key workers.
Rentplus’ model is fully funded by institutional investment bringing in additional housing finance and enabling the council to direct their grant funding to delivering social rented homes. There is significant interest in the sector from investors and an emerging market of SME providers.
With Homes England reporting a 34% decrease in affordable home ownership scheme starts over the six months to September 2020, whilst coronavirus was a factor, this highlights the importance of the much greater role that privately funded providers can play in boosting the overall number of homes for first-time buyers with no reliance on Government funding.
The Government and local authorities should do more to support innovative home ownership models and encourage their development on a much wider scale instead of putting all their eggs in the unproven, shared ownership basket.
https://redbrickblog.co.uk/2021/02/shared-ownership-will-not-provide-all-the-answers-for-key-workers-hoping-to-buy/#comments
