The firm, which has met with 130 potential funders so far, has already raised £110 million of funding from the City to progress its affordable housing model. It says that a further £40 billion of investment is potentially up for grabs if the Government would lend its support to broadening affordable housing models and tenures.
Saving for a deposit while renting continues to be the biggest obstacle to home ownership, with more than two thirds of people citing this issue as the primary challenge to buying their home in the Building Societies Association’s Property Tracker.
A recent report from Shelter meanwhile found that 75% of renters are unable to save more than £100 per month towards a deposit. First time buyers now face an average wait of 13 years to save for a deposit for a house in England and Wales.
Rentplus offers aspirant home owners an affordable opportunity to purchase their own home through a combination of affordable rents and a 10% gifted deposit. The Rentplus rent-to-buy model offers five year tenancies at an affordable intermediate rent, set at 80% of market rent, with the majority renewable on a 5, 10, 15 and 20 year basis. At the end of their rental agreements, tenants are given the opportunity to purchase their property and are eligible for a 10% gifted deposit from Rentplus to aid their mortgage application.
Richard Connolly, CEO at Rentplus, commented: “It is high time that we seriously consider the role which the private sector is able to play in the provision of affordable rent-to-buy housing. As the sixth richest country in the world we can and must do more to ensure that the correct policies are in place to offer truly affordable housing to more people. In the lead up to the General Election, we are calling on the next Government to lend its support to innovative housebuilding models like rent to buy that actually deliver, regardless of whether they are publically or privately funded.
“Attractive to private investors at scale, our rent-to-buy model has the capacity to deliver new homes today without any reliance on public money. In 2015/16, fewer than 3,000 homes were built for affordable home ownership, but attracting private investment to the sector can provide the capital to build and deliver now.”
