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Flexible Affordable Rent to Buy

Rentfirst is an innovative housing model designed to help individuals and families who are currently excluded from the housing market due to financial barriers. This scheme provides an opportunity to rent a home at an affordable level, starting at the local housing allowance rate, which includes service charges, for an initial period of five years. After this period, tenants can continue to rent the property at 80% of the market rent, making it a more affordable long-term option compared to typical market rents.

An important feature of the Rentfirst model is that tenants have the option to purchase the property at any time after the third year.  When they choose to buy, they are provided with a 10% gifted deposit (or before if agreed with the Local Authority), which helps to overcome the challenge of saving for a traditional deposit. 

This model offers tenants the benefits typically associated with private homeownership, such as the ability to select their own fixtures and fittings, giving them more control over the design and feel of their home.

Rentfirst is designed to provide a gradual pathway to homeownership for those on lower incomes who may not have the financial means to buy a home outright. By starting with a stable, affordable rent and providing support for eventual purchase, Rentfirst aims to make homeownership more accessible and achievable for people who might otherwise be excluded from the market. This approach helps to bridge the gap between renting and buying, supporting individuals and families in their journey to long-term financial security and homeownership.

Benefits of the Rentfirst Model

  • Pathway to Homeownership: Rentfirst provides a clear and structured route to homeownership for individuals and families who might otherwise be excluded from the market. With a 10% gifted deposit available after 3 years, tenants can take steps towards owning their home without the usual financial barriers like saving for a large deposit.
  • Affordable Rent Structure: Rentfirst begins with rent set at the Local Housing Allowance rate (including service charges), making it affordable for tenants, especially in areas where market rents can be high. After 5 years, tenants can continue renting at 80% of the market rent, which remains a cost-effective option compared to private renting. This ensures tenants have long-term affordability and stability.
  • Flexibility in Homeownership: Rentfirst offers flexibility for tenants who may need time to build financial stability. After three years of renting, tenants have the option to purchase the property at any time, empowering them to make the transition to homeownership at their own pace. This flexibility is ideal for those who may not be ready to buy immediately but aspire to do so in the future.
  • Financial Security and Support: Rentfirst helps tenants save towards their deposit with affordable rents, while also removing the burden of repairs and maintenance, which are typically the responsibility of homeowners. This means that tenants can focus on saving and improving their creditworthiness without the added financial strain of maintaining the property.
  • Customisation of Homes: A standout feature of Rentfirst is the opportunity for tenants to customise their homes. Unlike most affordable housing models, Rentfirst gives tenants the ability to choose from a selection of kitchen, bathroom, and flooring options. This gives tenants a sense of ownership and helps them feel more invested in their living space.
  • Long-Term Stability: Rentfirst offers tenants long-term security with the option to stay in the property for up to 20 years. This stability is particularly valuable for families and individuals who may face insecurity in the private rental market or who struggle to find affordable housing options.
  • Support for Low-Income Households: Rentfirst specifically targets people who have been excluded from the housing market due to financial barriers, providing them with an affordable solution that enables them to work towards homeownership. This model helps address the housing needs of people who may have limited access to more traditional housing schemes.
  • Local Authority Partnership: Rentfirst works closely with housing associations and local authorities to ensure that homes are allocated to those in need, based on local housing registers and allocation policies. This ensures that the properties are going to individuals and families who require affordable housing, contributing to the wider community’s needs.

Challenges

  • Long-Term Commitment: Rentfirst requires tenants to commit to renting for a minimum of 3 years before they can purchase their home (or before if agreed with the Local Authority). While this might seem like a long wait, it provides tenants with the time to stabilise their finances, save for a deposit, and prepare for homeownership without feeling rushed into a big decision.
  • Limited Availability: As the Rentfirst model is being rolled out in specific areas, there may be limited availability depending on the location. However, this model’s gradual expansion and partnership with local authorities mean that Rentfirst is likely to become a more widespread option in the future, increasing access to more areas over time.
  • Rent Increases After Five Years: After the first 5 years, the rent increases to 80% of market rent, which could be higher than the initial rate. However, this remains more affordable than standard market rents, and the transition is still designed to support long-term financial security by allowing tenants to continue saving toward homeownership.
  • Customisation Limits: While tenants can customise certain aspects of their home, such as kitchen, bathroom, and flooring, the options available may not meet the desires of every tenant. However, the ability to make these personal touches still provides a significant advantage compared to many other affordable housing options that don’t offer such flexibility.
  • No Immediate Ownership: While Rentfirst offers an eventual pathway to ownership, tenants may prefer a model that allows for faster ownership. However, Rentfirst’s approach of gradually working toward homeownership ensures tenants are financially ready and able to make a sustainable transition without the risk of financial strain.

Summary

Rentfirst offers a flexible and affordable route to homeownership, designed to support individuals and families currently excluded from the housing market due to financial barriers. For the first 5 years, tenants pay rent at the Local Housing Allowance rate (including service charges), making it a highly affordable option that allows tenants to accelerate their savings during this initial period. After 5 years, rent adjusts to 80% of the local market rate, still offering a more affordable alternative to typical private sector rents.  The model includes a 10% gifted deposit, helping tenants overcome the challenge of saving for a traditional deposit. In addition, Rentfirst allows tenants to personalise their homes, giving them a sense of ownership and investment in their future. With long-term housing security and the option to gradually transition into homeownership, Rentfirst offers a sustainable, structured pathway for those looking to enter the housing market affordably and steadily. This model provides a supportive solution for those seeking a practical route to homeownership, while fostering community stability and financial security.