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Rent To Own Your Home

Are you struggling to find a way to get on the property ladder?

Fed up with throwing money down the drain whilst renting?

What if you could find your dream first home, move right in and start making money from it on day one, secure in the knowledge that the property will be yours within a short period?

Welcome to our Easy Rent2Buy scheme.

  • Buy your own home over 1 – 3 years
  • vMinimal Deposit needed compared to a mortgage
  • No mortgage needed until you are ready for one.
  • You buy tomorrow at a price agreed today
  • You will own 100% of your new home – no shared ownership!
  • Move in to your new home within weeks
  • Your Right to Buy and the price you will pay is a legally binding contract
  • We help you to prepare to get the best possible mortgage when you are ready buy
  • Don’t want to buy when the option runs out? No problem, there’s no obligation!

Rent 2 Buy is the fastest way to get on the property ladder even if you don’t qualify for a mortgage today or if you haven’t got the full deposit now.

Step by Step Guide to Renting to Buy

How Does Renting to Buy Work?

A Rent to own scheme is where you move into a property as a tenant but you have a separate contract to buy the property at a pre-agreed price during a fixed period of time.

This gives a tenant time to prepare for a mortgage by building up a credit history.

Renting to own consists of three elements

  1. The Option Fee
  2. The Right to Buy Contract
  3. The Tenancy Agreement

Rent to Buy Option Fee

1. The Option Fee is the price you pay for the Right to Buy at the price agreed today. It is usually a percentage of the value of the property, but always much less than a bank would need for a mortgage today.

The option fee is offset against the agreed purchase price of the property, just as when you pay a deposit for a mortgage.

In other words if the agreed price was £100,000 and the option fee was £3000, then you would only pay £97,000 when you buy the property.

In some case it may be possible to commit to agreed work on the property instead of paying the deposit. This can be a useful alternative if you or your friends and family have DIY skills.

This means you effectively have some built in equity and can borrow less when you need to take a mortgage.

Rent to Own Contract

2. Your Right to Buy contract gives you the right to buy the property at the agreed price stated for a fixed period - usually 2 to 5 years depending on your requirements.

This price is fixed and can only be changed by the agreement of both the buyer and the seller. Your solicitor will review this contract on your behalf.

Even if the value of the property was to double during the contract period the seller cannot change the price, you have the guaranteed right to purchase at the agreed price.

You have the right to buy, but NOT the obligation, so you can decide not to buy for any reason.

This is because the Right to Buy contract has a value in itself and if you hold this right to buy it cannot be sold to anyone else unless you give up that right.

You can exercise your option to buy on Day 1 if you choose, or on the last day of the contract period.

Rent 2 Buy Tenant

3. The Tenancy Agreement is always the same type of basic agreement (called an AST or Assured Shorthold Tenancy) that you would have if renting on the open market. The terms and conditions are set out by Act of Parliament and have built in protection for both tenant and landlord.

Provided the terms of the AST are always met (such as paying rent on time) then the contract becomes a rolling one until such time as you decide to purchase the property.

Rent Credits

Rent Credits are a pre-agreed portion of your rent that goes towards your deposit when you purchase property, so that by the end of the agreement you have accrued sufficient funds to cover the deposit for your mortgage.

The amount towards your rent credits is agreed at the beginning of the contract, along with the purchase price, option fee and length of time.

How do I Know If I Can Get a Mortgage?

Many people are turned down for a mortgage without knowing why.

In many cases it can be something very simple. Currently, mortgages are harder to obtain than at any time during the last 30 years.

However, property goes in cycles and if you are already prepared and ready to apply for a mortgage and also have a property you know you can buy at a fixed price (one towards which you have already paid) you will be in the best possible position to take advantage of the market when bank’s mortgage criteria return to more normal standards.

We work closely with FSA regulated mortgage brokers who will help you to find the right mortgage product when the time comes.

You are also perfectly free to use your own mortgage broker if you prefer.

The alternative is still to pay rent to a landlord, but to have no financial return whatsoever on the rent you pay each month.