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The struggling affordable housing market in the region is reaching breaking point. The National Housing Federation Home Truths report showed that house prices in Devon are more than 11 times more than the average salary for the region. Many households in the area would need a pay rise of £34,561 to afford a home. Rents in this region account for 43% of the average net pay. These problems combined are creating an environment in which thousands are ‘barely managing’, and getting a foot on the property ladder is notfeasible.
Under Rentplus’ rent-to-buy model, tenants pay an affordable intermediate rent which is substantially lower than market rent in the local area, they then have the opportunity to purchase their home after 5, 10, 15 or 20 years. This includes no service charges, and no maintenance responsibilities, which means occupants 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 do so.
Richard Connolly, Rentplus CEO, said: “With house prices spiralling out of control and wages not keeping pace, the aspiration to own a home is unachievable for many in West Devon through traditional means. By combining affordable rent and affordable home ownership, our tenants are able to become home owners over a period of time, without having the disruption of actually moving.
“The recognition from the Government’s Housing White Paper of rent-to-buy and more innovative housing tenures bolsters our long-held belief that new models are best fit to help fix the UK’s housing crisis. Hopefully this should see local councils across the country echo the support that we have had from West Devon, and see our model rolled out more widely.”
Rentplus’ 11 new homes will be constructed by local housebuilder, Wainhomes South West, and will form part of the larger Batheway Fields development in West Devon. The development will include a real mix of tenure types, with 34 homes for private sale, 5 discounted homes for private sale and 8 for affordable rent – as well as the 11 rent-to-buy homes. Tamar Housing, will manage the homes once built and provide further support to new occupants to buy them in the future.
Julie Barnett, Chief Executive, Tamar Housing, said: “The housing situation in the South West is becoming unsustainable, and is preventing many from getting onto the ladder. There is a real demand for innovative rent-to-buy houses which will lead families on a pathway to homeownership and security. We look forward to working with both Rentplus and Wainhomes again in the future to expand the model’s use to fit the region’s needs.”