A new rent-to-own housing model that will give thousands of tenants their first step onto the housing ladder has been launched with plans to deliver 5,000 affordable homes across England by 2020.
The new model has been created by housing company Rentplus with the financial backing of private and institutional investors and the first agreements to deliver 900 homes have been approved by Plymouth City Council and Sedgemoor District Council.
The company is currently closing the first £70m of institutional funding as part of an overall plan to raise £600m – £700m of institutional investment over the next five years.
Rentplus brings together local authorities, national and regional house builders, developers and housing associations in a partnership to build much-needed new affordable homes to help tackle the nation’s housing crisis.
Rentplus is working with local housing associations to provide new purpose built homes available at affordable rents for an agreed period of between five and 20 years.
At the end of their rental agreements, tenants will be given the opportunity to purchase their property and will receive a ten per cent gifted deposit from Rentplus to help their mortgage application, although tenants will not be obliged to buy.
Construction work on the first development of 29 properties at Mannamead in Plymouth, 13 of which will be Rentplus homes, will begin in April. Tamar Housing Society, the leading housing association in Rentplus’ consortium in the South West, will manage the Rentplus properties in Plymouth.
Rentplus Chief Executive, Richard Connolly, said:
“We are delighted to launch Rentplus and to announce the first large scale agreements with Plymouth City Council and Sedgemoor District Council to commence the delivery of 500 new affordable homes in Plymouth and 400 across Sedgemoor. Rentplus offers the best of affordable renting and home ownership rolled into one. It will give many people the opportunity to own their own home for the first time and will enable local authorities to increase the affordable housing stock and reduce housing waiting lists.
“The ten per cent gifted deposit is a unique feature of Rentplus that will make a huge difference to many tenants struggling to put money aside. Unlike other proposed rent-to-own models, Rentplus is already a reality with the first development now underway in Plymouth and the business has the strong financial backing to enable sustained and rapid growth.”
Chief Executive of Tamar Housing Society, Julie Barnett, said:
“Rentplus gives Tamar Housing Society the opportunity to help meet the needs of many local households who aspire to home ownership but are unable to save a deposit due to high private sector rents. We will offer support and guidance to help tenants to move into home ownership which is often a stressful time for any first-time buyer.
“As a smaller local registered provider, Rentplus homes will enable Tamar to grow and increase our turnover which, in turn, means that we can offer a wider range of services to all of our residents. Rentplus is an exciting new affordable housing product which we are proud to support and promote nationwide.”
As part of the company’s ambitious plans for growth, the Rentplus team is already working extensively with representatives of national and regional house builders and has secured further significant interest from local authorities across England.
The Rentplus model has been created by teams from developer Pillar Land Securities and housing association Tamar Housing Society. The Rentplus Board comprises senior figures from the world of business, including Chairman John Gildersleeve; also the Chairman of British Land.
Mr Gildersleeve said:
“We have a unique opportunity to deliver an alternative solution to the country’s housing crisis while supporting the home ownership aspirations of the many thousands of people who feel locked out of the housing market. Rentplus is a sound and ethical investment that will benefit all those involved. Tenants have the chance to realise home ownership, local authorities increase their housing supply without grant funding and the increased work for house builders and developers will create jobs and help the economy.”
Rentplus will be launched at the Chartered Institute of Housing’s South West Conference and Exhibition (stand number 41) held at The Riviera Centre in Torquay from 15-17 April, 2015.