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Last month, Rentplus published research we had commissioned which revealed the full impact of COVID-19 on aspiring homeowners and in particular, on our key workers. It showed three in 10 (29%) key workers say COVID-19 crisis has made home ownership less achievable and that nearly 70% of those living in Leeds would support initiatives which would provide extra support to help our key workers onto the housing ladder.
Our research 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, especially when you consider that saving for a deposit (29%) tops the challenges for key workers when thinking about buying a home.
The problem has been made even worse with the pandemic pushing building societies to ask for even bigger deposits – 15% or 20% and some even talking about 40%. This is making it impossible for individuals and families on low incomes to raise a deposit, and Government schemes to help first time buyers, such as shared ownership and Help to Buy – have clearly fallen short of helping those it sets out to support.
It comes as no surprise to me that the people of Leeds would therefore get behind initiatives which provide extra support to help people onto the housing ladder, given the pure hard work and commitment that key workers have shown over this difficult year. Of those surveyed, 24% said the public sector should pay, 7% the private sector, and 51% said it should be a mix of private and public.
I believe there’s a real need to increase the use of creative approaches if we are to make any progress at real scale to give our valued key workers the opportunity to own their own home, and this is something the people of Leeds support.
And that is where Rentplus can help.
Rentplus is a route to home ownership that requires no upfront deposit. Our residents move in to a brand new home without having to pay a penny in deposit – thus removing the biggest barrier to homeownersip. Over 50% of our residents are key or essential workers and they have told us that they were not in a position to save even £10 a month, so raising a £30,000 deposit would have been impossible.
Our homes are managed by regulated housing association partners. Residents pay an affordable rent set by the council (usually 80% of the private rental market costs). They pay no repairs or maintenance for the period they rent. They can choose to rent for 5-20 years. The initial 5 years gives them a chance to repair their credit history and to start to save. Where we have had tenants in homes for nearly 5 years, over 90% are on target to transfer from being a renter to being a homeowner. When they are ready to buy, Rentplus will gift them a further 10% of the sale price towards their deposit.
I want to see families and working people given the chance to rent a property for between five and 20 years, to start to save, repair their credit rating and most importantly, to live in a community they want to be in and want to raise their family in.
That’s why I am working hard, talking to housing developers, to local housing associations and to councils across the region to ensure that Rentplus’ unique affordable rent-to-buy proposition is made available to those on lower or middle incomes, without savings.
If you are a developer, a registered provider or a local authority, you can contact Alasdair by emailing [email protected]
The research was conducted by Opinium Research between 28 August and 2 September among 2,000 UK adults and 500 NHS/key workers