L&Q launches UpToYou - new rent to purchase product

Following the successful launch of its 'UpToYou' product in March 2009 L&Q has extended the product for households earning between £12k and £25k. This new extended product is targeted at people on the housing waiting list and in existing social housing.

The new, extended UpToYou product launched at L&Q's Southbury Apartments in Enfield on 14 August with 21 of the available 25 homes reserved on the opening weekend.

With this new UpToYou product customers can rent before they buy which allows them to move in and pay a subsidised rent while they save. After 5 years they can become an owner. At this stage they can buy a share of their home, continue renting the rest and receive up to £5,000 from L&Q to help towards their purchase deposit.

The new UpToYou product will provide an incentive to work, an incentive to save, a financial incentive to look after your home and neighbourhood, and an incentive to buy. This pilot scheme uses existing Homes and Communities Agency (HCA) grant funding and allows for a portion of this grant to be converted into equity investment at a later date. This would enable the Government to share in any future profits, providing best value for money.

This scheme is designed to test the UpToYou model for lower income groups and depending on customer and stakeholder feedback L&Q would then look to work with the HCA and the GLA to extend the product across the capital. The first development with this new UpToYou product has a minimum household income of £16,451– L&Q is currently assessing its development pipeline for current schemes that can be converted to offer this product for lower income households. Following feedback on this pilot L&Q will look at future developments and funding to roll out the offer on a wider basis.

David Montague, L&Q Chief Executive, said "UpToYou has been so popular since we launched it last year that we are adapting it to suit people who don't earn enough or have sufficient deposit to buy now but have an aspiration to in the future. We are looking at a future characterised by increasing demands on social rented homes, fewer people able to purchase outright and a huge and growing hole in the middle. UpToYou is designed to fill that growing gap, providing much needed, sustainable home ownership.

"Housing associations are creative and resilient organisations which have something unique to offer in an age of austerity. We share a social mission with local authorities and our asset base is pledged to deliver that mission. Products such as UpToYou demonstrate what can be done in terms of innovative new models that provide flexibility and choice for customers."

About UpToYou:

• The new extended UpToYou will be available to people on the social housing waiting list and in paid employment
• Customers must have a household income between £12,000 and £25,000 p.a. when they move in however minimum incomes will vary from scheme to scheme depending on local market rents and house prices 
• The rent is calculated to be a maximum 65% of the rental value of similar homes in the area including service charge.
• With UpToYou you can rent before you buy which allows you to move in and pay a subsidised rent while you save. After 5 years you can become an owner. At this stage you can buy a share of your home, continue renting the rest and receive up to £5,000 from L&Q to help towards your purchase deposit.
• Customers benefit from a stable rent regime that increases by no more than RPI + 0.5% over the five years.
• There will be two financial incentives to help customers to save towards their purchase. It will provide an incentive to work, an incentive to save, a financial incentive to look after your home and neighbourhood, and an incentive to buy
• As long as you pay your rent on time, do not breach your tenancy and keep your property in a good condition L&Q will give you two financial incentives to purchase:

                           - We will give you the equivalent of 5% of your rent back after 5 years

                           - We will give you a maintenance incentive of up to £2500 after 5 years

First new UpToYou development

The first scheme to offer L&Q's new UpToYou product will be Southbury Apartments in Enfield. Launched on 14 August, UpToYou offers a selection of stylish contemporary one and two bedroom apartments is in an unbeatable location close to shops and transport. Southbury Road station is next door, with the high street shops and multiplex cinema only a walk away.

Price information

As part of UpToYou a one bedroom property at Southbury Apartments will cost from £425 per month to rent (65% of market rent) including service charge (market rent - £650-£700). The market value of a one bed home is from £160,000 at first let and £181,025 after 5 years (based on our standard assumptions on house price inflation). A minimum share of 25% after 5 years would therefore be £45,256. Minimum household income for UpToYou at Southbury Apartments is - £16,451

Purchase incentives are offered to help with deposits. Customers are eligible to receive up to £2500 after 5 years for keeping their home in a good condition. Customers will also receive an amount equal to 5% of the rent paid. On a one bedroom home at Southbury the rent is from £425 a month and rises by the rate of the Retail Price Index + 0.5%. The rent incentive on a one bedroom home at Southbury is therefore worth from £1354 over 5 years. In addition to the maximum £2500 maintenance incentive, in total customers are eligible to receive up to £3,854 in purchase incentives for a one bedroom home at this development.

Customers should contact L&Q on 0844 406 9800 or visit our UpToYou section for more information.