Rent To Buy

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Rent to Buy is an option that allows those struggling to get a mortgage to buy a property after renting it for a set period of time under a lease agreement.The tenant/buyer pays rent for the property and has the legal right to buy it within an agreed time scale for an agreed price.The rent paid can then be put towards the deposit needed for a mortgage. Depending on the length of the rental agreement tenant/buyers may find that after their rental period ends the value of their home means they have instant equity.

Rent To Buy Property For Sale

Little House is promoting numerous Rent to Buy properties for sale and thousands of homes being sold direct by the owner. Use our search to find your next property and make an enquiry direct to the owner who may have not heard of rent to buy. We have had many sellers who are struggling to sell opt to sell by rent to buy when it has been explained to them.
Sell Rent To Buy property – We are encouraging the growth of Rent to Buy in the UK by allowing sellers list Rent To Buy propety for Free.

Rent To Buy in the UK

The Rent to Buy option is set to change the way buyers finance a purchase of their home and is set to take off in the UK, it is being billed as one of the best ways to get on the mortgage ladder.
Why Rent to Buy?

The credit crunch has resulted in lenders becoming more stringent with their lending criteria. This has resulted in many people without large deposits or squeaky clean credit history unable to buy their own homes with a mortgage.

The Advantage of Rent To Buy

  • Makes the rent you pay turn into a worthwhile lump sum
  • Great for first time buyers
  • Ideal for those struggling to saving a deposit
  • Suitable for new Resident to the UK
  • Good for people with poor credit history or no credit track record
Companies that offer this service allow you to either choose your own property or choose one from a portfolio of theirs, it depends on what sort of lease option scheme or right to buy scheme they are offering. You can rent the property from them, typically a new-build flat and have the right to buy the property yourself within a three-year period.

Private Sellers Can Offer Rent To Buy

Property developers, buy to let landlords and home owners may use this method of bringing in an income to pay their own mortgages while, hopefully working towards a sale. For tenants and first time buyers the big draw is that if you do proceed to a sale you will have the rent you paid returned and you can then add this to your deposit.

The Disadvantages are Minimal

The rent you pay while waiting to buy may be priced at a premium of around 10 per cent. However, if you have not managed to save for a deposit by this time, you should have one by default. This is because the mortgage you need to buy the property should be considerably less than its value, providing of course that property prices have continued to rise.

Private Rent-to-Buy schemes do vary and it is therefore important that you understand the terms of the scheme you are considering.

Other names by which Rent-to-Buy schemes are called include:

  • Rent Now Buy Later
  • Rent2Own
  • Rent-to-Own
  • Try Before You Buy
  • Rent and Own
  • Own Now Pay Later

Sample Rent To Buy Property Advert from Private Seller

Unfurnished Rent Now – Buy Later !
This two bed semi is located just 4 miles south of Durham City centre. The kitchen is roomy and modern, the living room is bright, 2 double bedrooms, manageable gardens front and back.
The biggest plus is you can Rent and Buy at the same time! The purchase price is £85,000 Minimum deposit of £2,000 The normal rent is £100 per week Every week we will add a minimum of £25 towards your deposit

You will pay a minimum of £125 per week. End of year one £85,000 is your start price. -£2,000 deposit paid -£1,300 (extra you have paid) -£1,300 (extra we have paid) At the end of year one your purchase price is £80,400 At the end of year two your purchase price is £77,800 At the end of year three your purchase price is £75,200


The HomeBuy Scheme

HomeBuy is different from Rent To Buy as it enables social tenants, eligible key workers and first time buyers to buy a share of a home and get a first step on the housing ladder. It offers reduced rents and buyers are offered an equity loan of up to 30 per cent of the purchase price, co-funded by Government and the developer.

This section gives details for each of the available products and provides answers to the most common questions about the scheme. The Homes and Communities Agency website gives details of the HomeBuy agents (external link) who provide a contact point for affordable housing options in different areas of England.

The Government is offering real help for those at risk of repossession.  A new campaign launched on Friday 20 February 2009 to ensure that people are aware of the help available and how to get it at the earliest opportunity. Visit help (external link) today.

Author: Nick Marr

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