The Cambridge Building Society offers 70% rent back towards deposit for a first home
An innovative housing initiative that will repay tenants 70 per cent of their rent to fund a deposit on their first home has been unveiled by The Cambridge Building Society.
The ‘Rent to Home’ scheme is believed to be the first of its kind by a building society and is designed to reflect the original purpose of the 169-year-old organisation.
Initially offered on two refurbished flats in Great Shelford owned by the mutual, the successful applicants will be chosen using a replica of a ballot box that was used to determine how funds were issued by building societies in the 19th century.
Chief executive Stephen Mitcham told the Cambridge Independent: “We want to demonstrate to people that we are different. We were formed in and around Cambridge for people trying to solve a housing problem.
“For the people we do this with, it will make a huge difference to their lives.”
The Cambridge cited the example of an applicant moving into one of its rental homes and paying a market rate rent of £825 per month. After staying for a maximum of three years, the applicant would have £20,790 returned to them to put towards the deposit for their new home purchase. Applicants must take out a mortgage with The Cambridge to receive the full 70 per cent of their rent returned. Those who do not buy will not have money returned.
It is the second scheme under The Cambridge’s Making A Difference campaign, after it launched a 98 per cent First Step mortgage - the criteria for which are due to be broadened.
Finance director Peter Burrows told the Cambridge Independent: “When we are talking about our Making a Difference initiatives, we are not doing it to make a profit. We understand they are going to cost us money.
“It is going to be a big benefit and we are not going to be able to do this for huge numbers of people at first, because it will cost us. It will be a tangible reminder that we are here for the people of Cambridge and will give something back to the community. It goes to the philosophy of our business and what we stand for.”
The scheme opened for applications on April 17 and will close at the end of June or when 50 have been received. The Cambridge will assess the level of interest before determining how to expand the scheme, potentially by purchasing properties.
Announcing the scheme after the society’s AGM on Monday, Mr Mitcham added: “Budgeting to save thousands of pounds for a deposit is hard, especially for those who earn an average wage in and around Cambridge. As a community-focussed organisation with our roots in Cambridge we recognise our responsibility to the people around us. Profit making isn’t the objective of this launch, we’re simply doing it to make it easier for people who need help the most to make that first step into home ownership.
“At The Cambridge we are especially excited about this scheme. It is truly unique to have the ability to support the local community in this way. Loyalty from our members over many years have made it possible for us to launch solutions like Rent to Home.”