Rent to Buy - The Alternative way to Buy & Sell UK housing
The Answer for Housing Sellers & Buyers: Rent to Buy
Why is Rent to Buy in the UK Housing Market a “win-win” situation?
In an ideal world a vendor would like to sell their property immediately and the purchaser would like to buy the property from day one. But in the real world, and particularly recently, many properties do not sell, or even rent, quickly.
Also purchasers can find it hard to raise the necessary mortgage finance and particularly hard to find a deposit of up to 30% of the overall purchase price. You can see that in either of these scenarios the Rent to Buy scheme can remove the blocks on both sides of the equation.
Essentially we’re not dealing with an ideal situation for either side but by working together both parties can achieve exactly what they want eventually while improving the current situation. Further to the above simple scenario we will also look at a wide range of additional motivations on both sides of the deal showing why Rent to Buy is the only choice that makes sense from a time scale perspective and also assists both parties financially.
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Rent to Buy Schemes are here to stay!
A Rent To Buy Scheme is for people to acquire and sell UK property over a fixed period of time, at the beginning of the agreement there is no need to secure a mortgage or put down a full deposit. It is also possible for people in financial difficulties to rebuild their credit profile while buying a new property.
During the Rent To Buy Scheme you will either become a Tenant Buyer, paying rent of which part goes towards your eventual deposit once you purchase the property at the agreed time & price in the future (This means that when you pay your rent you are investing in your future prosperity rather than paying ‘dead rent’ that gives you nothing at the end), or you will become a Landlord Seller.
A Landlord Seller (Property Owner) will use a Rent To Buy Scheme to sell a property, they will normally require an initial deposit of up to 3% or 4%, but this is not always required, and a monthly sum on top of the market rent – all of these extra payments will be deducted from your Mortgage Deposit when the Tenant Buyer eventually buys the property.
Rent to Buy schemes has been introduced to the UK Housing market recently but it has been operating very successfully in America & Australia for decades as Rent to Own.
Rent to Buy means you own an option to buy the property at a fixed price at a fixed date in the future, this option to buy gives you the right but not the obligation to buy, so if it does not suit you at the end of the option term you can walk away or re-negotiate a new deal – but be aware most or all of your extra payments may be non-refundable if you do not buy the property.