Kettel Homes has launched the UK's first open market rent-to-own programme for first-time buyers who can't access traditional home financing.
Under the scheme, Kettel buys existing freehold single-family homes between �125,000 and �400,000 outside London, charging first-time buyers 2% of the property's purchase price, which will go towards their future deposit. The firm then rents the home back to them during an initial three-year rental term while they save for a deposit - fixing their rent, savings and future purchase price.
If the tenant decides not to purchase, they keep their accrued savings minus a relisting fee, while investors build a long-term PRS portfolio with those properties that aren't bought.
The most recent English Housing Survey found that young people between the ages of 25-34 have seen a 25% drop in homeownership rates compared with 20 years earlier, despite 48% of first-time buyers saying home ownership is more important as a result of the pandemic.
Backed by Nationwide Building Society and the Fair by Design Fund, Kettel aims to appeal to sellers as a professional cash buyer who can move quickly and provide certainty on the transaction.
It has launched its initial cohort exclusively for first-time buyers in Birmingham, Coventry, Leicester and surrounding areas, with the first home purchases already underway. Kettel will move into other cities across the Midlands and North over the next 24 months.
Trevor Stunden (main pic, left), CEO & co-founder of Kettel Homes, explains: 'Our goal is to expand homeownership to people who couldn't otherwise get access to traditional home financing at the moment. The long-term social and financial benefits of homeownership for both the individual and society are clear, making for stronger families and communities.'�
Pic: (left to right) Trevor Stunden with co founders Milan Pavlovic and Alex Tupper.