Many people have dreams about owning their own home but lack the financial capacity to accomplish it outright. Raising enough money to put down a deposit is typically the challenge, but with government help this can be overcome. There are several schemes available, including the Rent to Buy scheme, which is also referred to as Rent to Own.
Essentially, the Rent to Buy scheme affords potential homeowners the ability to rent properties for a period of up to five years whilst paying a top up which adds up to the property deposit. Within this duration the individual has the option to purchase the property, and if they’re unable to do so at the culmination of the five years they move out.
This model works in England and Scotland, while in Wales, renters get to pay the market rate for up to five years and have the option to purchase the property after the agreed rental term.
What to Consider
The Rent to Buy scheme can be attractive to potential homeowners, especially those who think their financial situation will improve after a few years. Some of the benefits of taking this option include:
- Credit Rating: Throughout the lease, the renter can work on improving their credit score to a level where they may qualify for a mortgage once it’s time to purchase the home.
- Test Drive: Potential homebuyers get the opportunity to live in a property before committing to purchasing it. In this way, they can get to learn more about the neighbourhood and any potential issues. For individuals who are committed to purchasing, they reduce the hassle of moving homes again after a short period.
- Access to Good Properties: Through the scheme, homebuyers get access to properties they wouldn’t otherwise be able to afford outright. They also get to deal with private landlords, which, for some, can provide an extra level of security.
Furthermore, it helps to become educated about analysing Rent to Buy offers, something that Paul Smith, Touchstone Education co-founder, offers through his online courses. The Rent to Buy option is one that the mentors at Touchstone Education have experience with and have devoted time to teach and explain to their students.