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Rent To Own pilot scheme launched ahead of national roll-out

A new rent-to-own scheme means some tenants can save a slice of their rent to help build a deposit to buy.

Financial platform Kettel Homes allows tenants to choose the home they want to buy, then rents it back to them at market rates while they save their deposit, build their credit score and enhance their affordability. 

Institutional property investors purchase the properties - typically single-family homes bought for between £125,000 and £400,000 outside of London - and then uses its platform to manage the process.

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By fixing their rent, savings and future purchase price from the beginning, Kettel sets out what it calls “a roadmap for first-time buyers to achieve their goal of homeownership within 36 months, ensuring the price of the property does not increase over time.“

Those using the service are asked to save a 10 per cent deposit and will be given a standard repayment mortgage as they transition from renting to owning. If the customer decides not to purchase, they still get to keep their savings minus a re-listing fee. The customer then has the option stay on renting the property.

The concept has been launched in Birmingham, Coventry, Leicester and surrounding areas, with the first home purchases underway, and is expanding to other cities across the Midlands and North over the next two years.

One of the firms behind the idea is the Nationwide Building Society, whose chief strategy and sustainability officer - Claire Tracey - says: “The fact is many individuals who are struggling financially have to pay more for the same goods and services. More needs to be done to make things fairer for those who have the least means. But these are not easy issues to solve and require a truly collaborative, cross-sector effort. 

“Through providing meaningful support alongside funding, we are looking to help transform the lives of those living in poverty through scaling long-term solutions to help tackle the challenges this presents.”

And Trevor Stunden, chief executive and co-founder of Kettel Homes, adds: “We are setting out to change that by using a blended model to help give aspirational first-time buyers the structure they need to get their foot on the ladder. Our goal is to expand homeownership to people who couldn’t otherwise get access to traditional home financing at the moment.  The long-term benefits of homeownership for both the individual and society are clear and makes for stronger families and communities.”

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    Kettel Homes are in business to make a profit I assume, or are they a housing association paying their management £300k a yr, either way they are in it to make big money for themselves.

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    This idea is much like something that has been circulating in recent years in the Rent 2 Rent lettings. They do expensive courses to pull the wool over owners eyes. I had it tried on me last year and they don’t give up easily, it was Rent 2 Rent with Purchase lease option. I don’t think much of R 2 R for a start renting your property and creaming off double whilst owning nothing and obviously no Mortgage’s for them, owners have all the responsibility if it goes wrong. Any figures or analysis by anyone on this, there are thousands falling fo R2R. I call it a scam I wonder how many have a purchase lease option attached you’d need to be off your trolley comprising ownership.

  • Fery  Lavassani

    I bet Tory MPs are the main share holders.

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    This is deplorable! Houses that are bought often end up in others hands and the tenants try to get back into social housing who do not have enough property to house everyone so thousands go into emergency B and B accommodation costing millions to the tax payer.

  • George Dawes

    All great until 2030 when they take it off you in the name of the climate agenda

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    George, they are talking about 36month (3 year) schemes, so 2030 doesn't come into it.
    Penny, I don't see how your comments (though often true) are relevant to this piece, which is about people choosing a house to buy, but not having to commit to a mortgage for 3 years, when they should get better terms.
    Michael: your response seems rather muddled and difficult to follow (punctuation?). I can't see much resemblance to rent to rent.
    Andrew: Kettel will be in it to make a profit, yes. The purchase price may end up a little higher, but it's fixed from the outset and the delay allows to save for the deposit and to improve their mortgage prospects (for those that need to, eg self-employed). It won't suit everybody by a long way, but it's an extra option.

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