Providing low risk income and support for housing association partners
Rentplus gives aspirant homeowners a unique opportunity to get on the property ladder through its affordable rent-to-buy offer. It supports those who are working and want to own their home but struggle to raise the large deposits demanded.
To date, solutions to the UK’s housing problem have failed to gain real traction and, in some cases, made the situation worse. Rentplus is changing that, by removing the most significant barrier to home ownership - the deposit.
It’s award-winning, no deposit, affordable rent to buy solution is the only home ownership scheme helping those on lower incomes or with debt history. The average Rentplus household income is <£32,000, compared to the government’s Help to Buy scheme of £54,000+.
The model is simple. Rentplus buys new homes from developers, working closely with local authorities, and registered providers/housing associations. The homes are leased to HAs who act as landlord, placing aspirant homeowners who meet local housing requirements, but are unlikely to meet the criteria for social housing.
Residents move without a deposit and pay a discounted, fixed affordable rent (80% of open market rental or local housing allowance) with no repairing or maintenance costs. This gives them valuable breathing space to clear debts, build a positive credit rating, and start to save towards a deposit to support future mortgage applications. When they are ready to buy, we gift them 10% of the sale price as a deposit.
For housing association partners, having Rentplus on their portfolio gives them the ability to help a new cohort of working aspirant homeowners who can afford the rent and future mortgage, but for whom the deposit barrier prevents them from accessing even shared ownership.
There are other benefits for HA partners, including rental income generated, which can be used to support work to benefit all residents, regardless of tenure.
Tamar Housing in Devon used the Rentplus rental income to invest in resources to benefit all Tamar residents, not just the Rentplus tenants.
Former CEO, Julie Barnett, explains: “There are clear benefits to working with Rentplus. As well as increasing our stock with less risk, Rentplus sits alongside traditional development programmes very nicely. There are obviously a lot of economies of scale in managing general rented and shared ownership stock alongside the Rentplus stock.
“The extra Rentplus revenue funded a specialist debt and welfare benefits advisor who worked with all our residents. We felt that people such as those on universal credit were struggling and having trouble coping – they need critical advice. The Rentplus-funded advisor is able to run through budgets, can suggest savings and help people get on their feet.”
Rentplus has also extended its support, helping Housing Associations to manage cashflow. During the pandemic it has bought homes which HAs committed to but were struggling to fulfil. It is also supporting HAs who may be struggling to fund the full development of a site, sharing the development costs, allowing HAs to benefit from income from all units, and delivering true multi-tenure schemes. Rentplus can help flip market units to affordable too.
The model fits the National Housing Federation’s ambitions. Nearly 40% of Rentplus’ existing residents are key and essential workers, mostly NHS and public sector, making the model a real Homes for Heroes champion.
Rentplus has over £2bn of funds to invest today. With cross-party political support it is defined as both a route to homeownership and a social rented provider under the 2018 National Planning Policy Framework. This means that developers, councils and HAs can diversify their ‘affordable’ mix by adding a hybrid rent to buy model to meet the needs of many people in desperate need of a home.
Rentplus is making a real difference as a placemaker, providing quality homes, offering a lifeline to people whose dream of homeownership has always seemed out of reach.
Visit the Rentplus website here