NHF Affordability Blog

Apr 7, 2017
Given the UK Government has conceded the housing market is broken it is no surprise that we are suffering from a housing affordability crisis. The problem is particularly acute for our public sector key workers and local working households – the people who keep our towns and cities running. These are ordinary people, including nurses and teachers, who have endured sluggish pay growth while the cost of living has continued to spiral in recent years.


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.

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