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Local people in Oadby and Wigston have the unique chance to become homeowners without the need for an upfront deposit in a first for Leicestershire.
Oadby and Wigston Borough Council has signed an agreement for eight Rentplus-UK affordable rent to buy homes to be included in the social housing element of the Redrow Homes Clarence Fields development in Wigston.
Rentplus homes allow working people to move into brand new home with no deposit. They pay affordable discounted rent for a period of 5-20 years before being given the opportunity to buy the home after 5 years. At the point of purchase, Rentplus gifts the tenants 10% of market value to add to their savings, which in turn lowers their mortgage.
The scheme has already proved successful elsewhere in the country and the adoption of the Rentplus scheme by Oadby and Wigston Borough Council makes Leicestershire the 24th county where Rentplus has tenanted properties, is in contract or has offers accepted to build new affordable rent to buy homes.
In this area local people would need to have in excess of £25,000 of savings to cover a 10% deposit for a two bed home – plus and fees. This makes it difficult for many trying to get onto the property ladder. Even those able to save £200 a month would take 10 years to save this amount.
There are 43 new homes on the Redrow Homes site; of these, 35 are open market and eight are being delivered under a S106 agreement with the council. The houses add to local social housing stock without the council needing to raise the funds and they will derive income from the rents.
The council has identified eight families drawn from its waiting list. Some will move out of existing council homes into the Rentplus homes, freeing these up for allocating to those in greatest priority need.
Councillor Bill Boulter, said: “We’re delighted to be part of this innovative partnership which provides brand new homes to families on our housing waiting list.
“The other great advantage to this scheme is it gives the families the opportunity and time to save up a deposit so they can buy the home in future, getting themselves onto the property ladder.
“Importantly too, it allows the council to add to its housing stock, collect income from rent, but not have the up front cost of needing to buy the homes.”
Steve Collins, chief executive at Rentplus, said: “We’re excited to be offering these lovely homes in partnership with Oadby and Wigston Borough Council.
“With escalating house prices, the ability for our key and essential workers, and others on low to middle incomes to save for a deposit sinks with every percentage price rise in houses.
“Rentplus removes that deposit barrier, genuinely turning renters into homeowners. And unlike other types of home ownership schemes like shared ownership, tenants own 100% of their home.
“I hope that this will be the first of many Rentplus homes made available for local people.”
Rentplus started in the south west of England with tenants moving in to the first homes in 2016. In July 2021, the first ones completed on the purchase of their home this summer, securing high street mortgages and owning 100% of their home, unlike with Shared Ownership or Help to Buy.
The majority of Rentplus tenants around the country fall into key and essential worker categories, traditionally those on lower or middle incomes. Many are in private rented accommodation, unable to save towards their deposit. In some areas tenants move from existing social housing into a Rentplus home, freeing up their much needed homes for those in greater need on the council’s waiting list.
The Clarence Fields site is in Wigston, centerally located in the country, just five miles from Leicester city centre, and equally close to the M1. It is perfectly placed for work and leisure with outstanding local schools within easy reach, and the beauty of open Leicestershire countryside right on the doorstep.
Rentplus is funded by institutional investors, providing affordable rent-to-buy homes with no grant or public subsidy. Partners benefit from having an extended tenure offer for local people, and increased rental income from the homes.
In July 2021, Rentplus celebrated its first sale to the first tenant who moved into a Rentplus home in Somerset without a deposit in 2016. After 5 years of paying affordable rent, the tenant now owns 100% of their home. Their 10% gifted funds from Rentplus that they added to their savings for a deposit for their high street mortgage.
Pictured by the door L-R: Chris Eyre Lettings Officer at O&WDC, Ward Councillor, Cllr Bill Boulter with Steve Collins CEO at Rentplus-UK and upstairs, Cllr Lynda Eaton JP with Deputy Leader Cllr Samir Haq.