Hot on the heels of announcing its new £500,000 grant scheme, The Cambridge Building Society is continuing its community mission to help local people with housing by unveiling its third ‘Rent to Home’ flat.

The generous scheme is so novel that, chief executive Peter Burrows reveals, some applicants have a hard time grasping it.

“That’s part of our challenge,” he tells the Cambridge Independent. “Because it’s unique and it’s of very material benefit, people look it and say ‘I don’t understand it, what’s the catch?’.”

The scheme allows lucky applicants to rent a property from the building society for up to three years, but then get back up to 70 per cent of the rental money they have paid towards a deposit on their first home through a mortgage with The Cambridge.

“We are letting you rent one of our properties from us, but instead of keeping your rent we are putting it to one side. When you’re ready to buy your own house, you withdraw most of it. Typically, people are going to have accrued £10,000 to £15,000, so that’s a huge benefit, making the difference to people getting their deposit together.”

The Cambridge pioneered the scheme , and residents moved into two of its flats in Great Shelford last year.

Now it has renovated a third flat it owns beside its branch in Cottenham.

“We will be looking at applicants over the next few weeks, then choosing a tenant using a ballot system,” explains Carole Charter, the building society’s chief commercial officer .

The building society hopes to expand the scheme further to help more people, perhaps by working with partners such as developers.

“We want to gradually increase the number of properties we’ve got to help a growing number of people,” says Peter.

Rent to Home is part of the mutual’s ‘Making the Difference’ initiative – a scheme that aims to reimagine the building society’s original purpose of helping local people get on the housing ladder for the modern age.

Earlier this month, the Cambridge Independent exclusively reported the launch of another initiative, The Cambridge Building Society’s Community Fund, which has made £500,000 available to local community groups that help with housing.

Applications are now invited for individual grants of up to £10,000, which will be administered with the help of Cambridgeshire Community Foundation . It will deploy funds from the Dormants Assets Scheme – a UK government programme that enables financial institutions to use dormant funds for the public good.

“We’ve been thinking for the last couple of years now about the best way to bring our original purpose to life in the 21st century,” says Peter of the motivation behind the scheme. “Obviously we are a mutual business, very focused on our local community, and when we had the opportunity to participate in the Dormant Assets Scheme, which hadn’t been previously been open to organisations of our size, it seemed the ideal thing to do.”

But he stressed that if a customer suddenly remembers they have left money with the organisation, or an estate finds a sum is owing, those funds will not have gone.

“The natural choice for us was to focus it on homes and housing issues. Any charity or community group that works in that space and can contribute to the good of local people in terms of homes, housing, shelter and advice, and those particularly focused on vulnerable people who might struggle with housing, can be considered for a grant from the fund,” explains Peter.

The building society is the second after Newcastle Building Society to run such a scheme. It intends to hold two rounds of applications each year with the first open now and closing on November 1. A panel from the building society and foundation will determine the winners.

Carole says: “They could be people who are at the sharp end of helping people – such as the charities around Cambridge dealing with emergency housing needs – right the way through to groups that are looking to help furnish peoples homes. It might help those displaced for a temporary period and seeking refuge.

“There has been a lot in the press over the pandemic period about people that are suffering from domestic abuse who have to move out of their home. So it could be a wide range of organisations.”

Cambridgeshire Community Foundation, which can provide advice to applicants, will also help to follow up on the schemes and confirm their benefits.

“We want to see the good that it’s doing in the community,” adds Peter. ”We’re really excited to get it going.”

The impact of the Covid-19 pandemic has clearly raised financial concerns for many.

But Peter tells customers: “If you are struggling please contact us. We have plenty of processes and we will talk to you about the best way of working through this.”

The building society has spoken to its customers who needed help.

“The majority of them we granted payment holidays to, because that was right for them, and most of them have started repaying now. For some it was about a different product or a broader restructuring of their finances.

“The number of people coming to us now has dwindled to a trickle. But we do wonder with things like the furlough scheme coming to an end whether the full economic impact of Covid-19 has been felt on the economy yet. It looks like 2021 might be a difficult year economically for the country.”

Carol adds: “The sooner you can talk to your lender that you are anticipating that you will be struggling to pay your mortgage, the more options you have.”

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Meanwhile, the housing market has proved “surprisingly buoyant” in the last couple of months, Peter says, perhaps with some latent demand built up during lockdown aiding the revival.

“Our teams have been really busy,” adds Carol. “The area that isn’t as buoyant is first-time buyers. Shared ownership is a viable option for first buyers still and we are offering those types of mortgages.”

The government’s stamp duty holiday, running for most prices until March 31, 2021, has also played a part.

“August is traditionally a quiet month. That has not been the case this year,” says Carol.

“I think what the pandemic has changed in people’s minds is what they want from a home.”

Peter adds: “And the demand hasn’t been supported by a big fall in prices. Fundamentally house prices have held up pretty much nationally.”

The Cambridge’s branches are all open now, although closing a little earlier than usual as customer footfall is still lower than pre-pandemic levels. Those hours could soon be extended, although Peter notes that the pandemic has also introduced more of The Cambridge’s customers to the convenience of its digital services and call centre.

Barclays and the Co-op have both announced branch closures in Cambridge. But Peter sees a future for the building society’s stores, which are being refitted in turn to provide a more modern environment .

“This year we have completed and refurbished our Bar Hill store and we’re in the process of sorting out the new Cherry Hinton location. We still think there’s a place for us on the high street,” he says.

How to apply

To apply for the Rent to Home scheme, or find out more about the Cottenham flat, visit The Cambridge’s website.

The scheme is open to first-time buyers who are or become a member of The Cambridge Building Society and receive a modest income. Open days will be held at the home on October 17 and 21.

To apply for funding from The Cambridge’s Community Fund, visit its dedicated webpage.

Read more

How The Cambridge Building Society’s new chief executive, Peter Burrows, aims to make a difference

The Cambridge Building Society promotes Richard Brockbank and Carole Charter to the board

The Cambridge Building Society offers 70% rent back towards deposit for a first home

The Cambridge Building Society opens new-look Great Shelford store