How does rent to buy work?

It can be hard to save up for a deposit while paying rent.
The Rent to Buy scheme can help you save by reducing your rent.
We are here to help you on your journey to becoming a homeowner, so give us a call.

Rent to Buy scheme

How does the Rent to Buy scheme work?

Saving for a deposit in order to get on the property ladder can be particularly difficult when faced with a monthly rent. Some housing associations and registered providers offer properties for intermediate rent, which equates to around 80% of the market rent level. Although such properties are not available to buy, the scheme allows tenants to save for a deposit by paying less rent than they would otherwise outside the scheme.

On the other hand, the housing association or registered provider may also offer properties under the Rent to Buy scheme. This option lets you pay a rent of about 80% of the market price for up to 5 years, so you can save up for a deposit.

The provider would discuss your savings plan with you at the outset and how they will regularly review your progress to help ensure that you are still on track and eligible for the purchase. Once you have saved enough money, you can then buy your rented home outright or buy a share via the Shared Ownership scheme.

However, if you do not exercise your option to buy within the agreed timeframe, you will have to leave at the end of the tenancy period. In this case, you can use your savings as a deposit to buy another property independent from the Rent to Buy scheme.

How can we help you?

Our team of knowledgeable and experienced mortgage brokers are well-equipped to help you navigate the world of Rent to Buy schemes. We recognise that everyone’s circumstances are different and their needs are individual to them, so we will use our knowledge of the industry to find the best mortgage deal for you.

Do I qualify for the Rent to Buy scheme?

In order to qualify,

your household income cannot exceed £60,000 to £80,000 per annum (dependent on your location),
your circumstances must be such that you would not be able to buy a suitable home without assistance,
you cannot be the owner of a property or will have sold by the time the tenancy starts (some providers require that you are a first time buyer), and
you cannot have outstanding credit issues.

In addition to the above criteria, priority may be given to military personnel or those who live or work in the area.

Variations of the Rent to Buy scheme

It is important to note that different providers may use varying names or terms. If you come across phrases such as ‘Rent to Buy’, ‘Rent Save Buy’, ‘Rent to Save’, ‘Rent to Own’, ‘Try Before You Buy’ and others, it is vital that you check the terms and conditions in detail to ensure that you understand the conditions of a potential purchase.