Pricing
Your rent and monthly savings depend on the characteristics and location of your Preferred Home and your Initial Principal Savings contribution.
Initial Principal Savings
Prior to Purchase Date and your subsequent move-in date, you contribute a minimum Initial Deposit / Principal Savings payment, which will be equal to:
(a) The higher of:
(i) 3% of the Purchase Price and;
(ii) £3,000, if the Purchase Price of your Preferred Home is less than or equal to £100,000 or;
(b) The higher of:
(i) 3% of the Purchase Price and;
(ii) £4,000, if the Purchase Price of your Preferred Home is greater than £100,000.
This will be placed in a protected deposit scheme or similar and will contribute towards your savings.
Example 1:
If the Purchase Price of the Preferred Home is £80,000, 3% will be £2,400. In this case, the Initial Principal Savings required will be £3,000.
Example 2:
If the Purchase Price of the Preferred Home is £150,000, 3% will be £5,000. In this case, the Initial Principal Savings required will be £5,000.
Rent
Your monthly rent will be based on the estimated market rental value of your Preferred Home, taking into account its characteristics, quality and location.
Your rents may be increased in line with the Consumer Price Index (CPI), the common measure of inflation set by the government and subject to our rent review provisions and discretion.
Monthly Principal Savings
Your Monthly Principal Savings are based on your monthly rent, the Purchase Price of your Preferred Home and the level of Initial Principal Savings paid at the beginning of our agreement. Over the term of the agreement, you are expected to contribute at least 10% (max. 30%) of the Purchase Price of your Preferred Home towards a deposit to enable you buy the home from us.
Your Monthly Principal Savings will consist of:
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Rent contributions - a share of your monthly rent, equivalent to the same % contributed towards your Initial Principal Savings. For example, if the Initial Principal Savings you contributed was 3% of the Purchase Price, 3% of your monthly rent will be contributed towards your monthly principal savings.
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Deposit Payments - The difference between the total percentage share (min. 10%) of the Purchase Price of your home contributed over the lease term, and the Initial Principal Savings, pro-rated monthly over the lease term. For example, if your Initial Principal Savings contribution was 3% of the Purchase Price, then you will be expected to contribute a min. 7% of the Purchase Price over the lease term.
Share of Capital Appreciation or Loss
You will share any growth in your home value (after costs) with us. The same will apply for any capital value loss.
Under the property ownership structure, a special purpose vehicle (SPV) will be set up to legally own your home for the term of the agreement, with its assets being home and your accumulated savings over the term of the agreement.
The purchase price of your chosen home, which will be fully covered by our funders, will secure their share of the SPV with their share increasing with growth in your home's value.
Your Initial Principal Savings will secure your share of the SPV at the start of the agreement and will increase in line with your monthly contributions to your Principal Savings over the term of the agreement.
Growth in Your Home Value over your lease term
You will receive all Capital Appreciation proceeds in addition to your Principal Savings if;
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your total Principal Savings is at least 10% of the Purchase Price at the start of the agreement and;
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the Capital Appreciation is less than the difference between 12% of the market value of the home at the end of the agreement, and your total Principal Savings.
Otherwise, in addition to your Principal Savings, you will receive Capital Appreciation proceeds equivalent to the difference between:
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your total Principal Savings and;
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a percentage, equal to X% + 2% premium, of the market value of your home at the end of the lease term.
where X% is the percentage of your total Principal Savings to the Purchase Price of your home at the start of the lease term. This is subject to a 30% cap.
We ensure that you receive at least 12% of the future price of your home as a deposit towards your purchase from us. However, if the capital value of the home does not increase enough to guarantee this minimum, you will receive all capital gains in the home in addition to your Principal Savings.
Loss in Your Home Value over your lease term
If the average annual decrease in value of the home over the lease term is;
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Less than or equal to 4%, the tenant will receive an Exit Deposit Multiple of 1x.
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Greater than 4% and less than or equal to 10%, the tenant will receive an Exit Deposit Multiple of 1.2x.
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Greater than 10% and less than or equal to 15%, the tenant will receive an Exit Deposit Multiple of 1.6x.
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Greater than 15% and less than or equal to 20%, the tenant will receive an Exit Deposit Multiple of 2x.
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Greater than 20% and less than or equal to 25%, the tenant will receive an Exit Deposit Multiple of 2.4x.
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Greater than 25% and less than or equal to 30%, the tenant will receive an Exit Deposit Multiple of 3x.
where Exit Deposit Multiple is the ratio of:
(a) percentage of the Sale Value of the home that you receive as deposit towards your purchase from us at the end of the lease term; to
(b) percentage of your total Principal Savings to the Purchase Price of your home at the start of the lease term.
We ensure that you receive a significant deposit to purchase the property from us, and to mitigate losses for you and our funders, in the event of a down-market.