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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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Original poster

To think about rent to buy scheme

22 replies

SoIAskYou · 27/01/2018 13:07

Just that really.
We're thinking about moving, and not completely ready to buy yet but we will be soon. I'm thinking a buy to rent scheme might be better than just renting for a while and then moving again to buy. Is this U? I read about it online but wanted to ask if anyone with personal experience can give feedback - we're in the UK. Or is it an unreasonable idea/binds us to a contract unnecessarily?
Thanks!

OP posts:

Original poster

SoIAskYou · 27/01/2018 18:58

bump

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KanielOutis · 27/01/2018 20:16

I've never heard of it before, but a quick google and it looks like a great idea. One of the main reasons people can't buy, is they can't afford the deposit while renting. This gives you and chance to rent and save at the same time.

Lj8893 · 27/01/2018 20:18

We are in a rent to buy property. The concept of it is brilliant, however our house is a new build and is certainly not been built to the same spec and quality as the private (for sale now) ones. Unfortunately I don't think we will end up buying our house and will buy somewhere else before or at the end of our tenancy.

Original poster

SoIAskYou · 27/01/2018 21:11

Lj8893 We're thinking about a house we've seen that's not new build, and we want to ask the owners if they would consider rent to buy.
We will probably be able to buy in a year. I guess I'm just thinking there might be small prints to take into consideration so we don't end up in a complicated situation iyswim.

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Lj8893 · 27/01/2018 21:21

Oh I have no idea how it works with a private sale. We have done ours via a scheme ran through a housing association.

thecraftyfox · 27/01/2018 21:28

Rent to buy is only for new builds I think and there are certain criteria to meet. I haven't seen anything to suggest it is for houses that are on the open market.

OnionKnight · 27/01/2018 21:30

It is not for houses on the open market.

Original poster

SoIAskYou · 28/01/2018 00:36

I hadn't realised it wasn't for houses on the open market. Does it mean that owners aren't allowed to come to such an agreement with their tenants privately? Or is it just at their discretion?
Sorry first time thinking of buying and not very knowledgeable about it.

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adayatthebeach · 28/01/2018 00:41

Most sellers that are living in the property need the money from selling to buy for themselves.

Lj8893 · 28/01/2018 09:14

The rent to buy scheme is a government scheme where you rent for a period (usually 5-10years) and then when you buy the property you are gifted 10% of the property value to put towards your deposit. So it wouldn't work in a private sale!

OnionKnight · 28/01/2018 09:59

Does it mean that owners aren't allowed to come to such an agreement with their tenants privately? Or is it just at their discretion?

How would that work and how would the sellers afford to move?

Original poster

SoIAskYou · 29/01/2018 02:57

The sellers don't live in the house they're selling onion, it's vacant, so from what I can see they're not selling to be able to move. Though they might need the money immediately for something else, I don't know, but assuming hoping they don't, I was thinking maybe we could ask them to rent for a few months, up to a year and then buy, and maybe the rent we paid until then would count towards the amount they're requesting to sell. If that makes sense? it's just a thought.

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Original poster

SoIAskYou · 29/01/2018 03:01

Sorry pressed enter too soon

We would pay full rent until then, not a reduced amount and they would be full owners of the house. So no risks for them, they would only agree not to sell to someone else before we make an offer - there would be a deadline/timeline of course.
Just thinking that if the rent we pay for a year counted towards buying, it would take a chunk off the amount they're requesting and we can start living in the house we like.
Like I said, I'm not very knowledgeable in this area and I might be talking nonsense, just wondering.

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mischiefinprogress · 29/01/2018 04:11

What would be in it for the private seller?

ApacheEchidna · 29/01/2018 04:42

The government rent-to-buy scheme (along with other things like shared ownership) is designed to use taxpayers' money to prop up the building industry and prevent a house price crash. These schemes are only applied to new-build properties that frankly wouldn't sell at what the builders want you to believe is "full market value" so the headline figure that you theoretically get a discount on is a lie from the start.

A private seller has no obligation or desire to do that.

What they do have a right to is the ability to benefit from their own property. If they retain full ownership of the house during the rental period then the rent you pay is theirs by right - partially covering the legitimate costs of ownership (repairs, buildings insurance, servicing of utilities etc) and the rest as a reasonable return on their capital. There is no reason why those rent payments should be credited to you even partially when you come to buy. To do so would be depriving them of their assets through sheer altruism towards you.

What would happen if house prices crashed during the rental period? Would you have a commitment to buy at pre-crash rates? Or would they take the full risk of that and just have to suck it up that they get less money when you are ready to buy?

Sorry to be discouraging OP - I know it must be really tough.

SandLand · 29/01/2018 04:43

If you pay full market rent how are you going to save the deposit which you can't save paying your current rent?
Surely the deposit needs to be actually available, either as cash in your account, or as equity in a property you own?

Lj8893 · 29/01/2018 08:28

Sorry op but I think you are being very naive.

In the time you rent the property the owner would need to be classed as a landlord, there's a lot of costs behind that such as landlord insurance. What happens if the property needs repairs in that time?

If I were the seller I don't think I would go for it. There's nothing in it for the seller.

If you believe you will be able to buy a property in a years time then why not wait a year?

Spam88 · 29/01/2018 09:15

I can't see why any seller would go for this as you propose it. They have all the risks of having tenants, quite possibly have to go through the hassle of changing their mortgage to a buy-to-let, but make no extra money because although you're paying them 'rent' you're not actually because you want that money to count towards buying the house, so you're basically just asking them to save it for you until you're ready to buy.

Original poster

SoIAskYou · 29/01/2018 09:19

Sandland I can pay rent and save, that's why I said we'll be ready in a year or maybe before, as most of the deposit is saved already.
I could wait a year. It's just the house we've seen is perfect for us and vacant, so thinking if there is a way we can come to an agreement with the owners that's beneficial for both parties. Rent to buy was one idea, and I can see your points, it's clearer for me now, thanks.

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Lj8893 · 29/01/2018 09:42

What about the help to buy scheme where the government loans you some of the deposit?

Lj8893 · 29/01/2018 09:45

Ignore that, that's for new builds.

I think you will have to accept that this property is not the one for you, or see if you have enough saved for a deposit as it is.

Original poster

SoIAskYou · 29/01/2018 10:03

Lj yes it seems like it.

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