Do you have more information that explains rent to buy?
Yes, after you've read our FAQs here check out "How Rent to Buy Works"
No mortgage is required to move in, so how do I buy the house?
When you move in, you do not need a mortgage. You don’t need a large deposit and you don’t have to worry about getting approval from a lender. You have up to 5 years to buy the Rent To Buy house at the fixed price.
If for whatever reason you are not ready to buy after 5 years, the agreement can be extended. Only when you buy will you need a mortgage.
This is why the scheme works so well. This time allows your deposit to build to a level where (subject to status) you may be able to get a mortgage for a high street bank who will typically require a 10% deposit.
Our Rent to Buy plans are designed to allow you to build up this level of deposit while you enjoy living in your new home.
Is Rent to Buy a Government approved scheme?
It’s a private sector initiative which in parliamentary reply to David Morris MP concerning a Rent To Buy scheme, received support of Grant Shapps (Housing Minister). He expressed his backing for the scheme because it addresses the current challenges of the housing market.
What is the difference between buying in the first 5 years?
Our Rent To Buy Scheme has been designed to enable people to build up a sufficient deposit in the first 5 years (10%), because most people want to own their house sooner rather than later.
For certainty we fix the price and rent. Given that rents can increase by 5% each year, this gives you a massive saving over the fixed term.
However, we appreciate that life is not always predictable and you cannot be 100% sure if you will be in a position to get a mortgage at year 5. For this reason, our agreements provide that you can purchase your Rent To Buy home at any time up to 5 years plus we can offer a 1 year extension . This means that you can proceed with greater peace of mind.
Example (based on a fixed house price of £100,000):
If prices rise at an average of 5% each year, after year 5 the value will be £127,628, but you can buy at any time within the first 5 years for £100,000, making a £27,628 profilt.
House price increases are based upon government indexed regional data as reported by HM Land Registry and published online at Land Registry House Price Index
The price is fixed from when you tell the seller that you want to buy and it is valid for 90 days allowing you plenty of time to complete.
After the first five year period, you continue to pay rent and your top up deposit as normal. This means that you will have an even bigger deposit fund when you come to buy.
What if I can't get a mortgage?
Given that you have a maximum of 6 years to purchase your Rent To Buy house, you have plenty of time to arrange a mortgage. However, if you are unable to get a mortgage you could:
Is it true that I can still sell the house at any time for a profit?
Yes! This is one of the best features of our Rent To Buy scheme. You get all the benefits of home ownership, without needing a mortgage.
So as your deposit grows and if house prices increase over time, you can sell on and release the equity and start moving up the housing ladder. Your days of paying dead money for rent will be over.
What happens if house prices fall over 6 years?
In the history of the housing market there has never been a period where house prices have dropped over a 10 year period (source Nationwide data recorded since 1952).
However if they did, you will have hopefully built up enough equity to still put you in profit. Should there be a serious price correction in the housing market, you can simply walk away without any obligation. Latest house price index information can be found at Nationwide House Price Index
Why don't you refund the deposit if a buyer does not complete on a purchase?
We are looking for people committed to buying our houses. We have provided an affordable Rent To Buy Scheme and the seller benefits from the certainty of a sale at a fixed price. They pass on the benefit of any house price growth in the first 5 years to you.
Just as someone who is buying a house with a mortgage cannot ask their lender for their deposit back if they want to move, it is only fair that the same principal applies to our Rent to Buy legal scheme. However, as with a property bought in the traditional manner, you can sell to release any equity and get back your deposit.
How is my deposit protected?
Your property is managed through a letting agent. They are a national property management company and members of ARLA and subject to their codes of practice and rules in respect of deposit monies. The deposit money is not paid to the owner, but retained by DPS in a separate Trust Account.
This is insurance protected by DPS making the deposit completely safe. The scheme provides you with insurance protection for your deposits, paid up to a maximum amount of £25,000.
When you complete the purchase, the money is paid to your nominated solicitor. If for whatever reason the owner did not complete the sale (and remember, they are legally contracted to do so), the Trustees are legally contracted to repay the money to you in full.
This is extremely unlikely, but would cover such eventualities as the seller going bankrupt or defaulting on their mortgage which prevents a sale. If you walked away from the property, or failed to complete on the purchase, the Trustees would pay the monies onto the owner in the same way.
What happens if somebody dies before the house is purchased?
Morbid, we know, but our lawyers think of everything! If it’s:
Is interest paid on my deposit?
No. Any interest that is earned on the deposit is used towards administering and auditing the scheme, together with the insurance protection that we put in place.
How does the legal process work?
When you buy a house the traditionally, you exchange contracts. This is when both sides are legally committed to the sale and purchase. You then agree a date for “completion” – the exciting part when you get to move in.
With “Rent to Buy”, you enter into a legal contract in the same way, except “completion” (the point where the house is signed over to you and the monies are paid), is extended to up to 6 years by the “Rent to Buy” contract.
However, you can move in straight away. The seller is legally committed to sell the house at the fixed price. They cannot back out, change their minds or revise the price. You may walk away if you decide that for whatever reason you do not want to proceed.
We retain our own Compliance Consultant to ensure all of our literature, brochures and documentation are clear and not misleading. Our operations are fully compliant with “Treating Customers Fairly” requirements. The Rent to Buy scheme does not constitute an agreement which is subject to any current FSA regulations.
So if house prices double, will the owner try and change the price?
No! Under the legal agreement the price is 100% fixed for 5 years! Your lawyer will make sure that all the legal contracts confirm that the price is guaranteed. So you get the benefit of today’s price and hopefully many years of house price growth all to yourself!
Who carries out maintenance to the house?
It is your home now and for you to decorate and improve as you please. We only ask that you seek the owner’s consent if you carry out any works of a structural nature requiring planning or building approval. And remember, you benefit from any increases in the value of the property as a result of any improvements.
The seller will carry out an annual gas safety check. You cover other maintenance costs and utility bills as you normally would do when you own a house.
What About Insurance?
The seller pays for house building insurance which is an additional saving for you. If you need to make a claim on the building insurance, it will be subject to you paying a £500 excess. You must take out contents insurance for your own possessions.
What Happens If I Can't Afford the Payments?
Just like having a mortgage, it is your responsibility to pay the rent and monthly deposit top up. If you get into any difficulties you should contact us to agree a proposal for payment.
Just like a normal mortgage or tenancy, your home is at risk if you do not keep up your repayments. If you default upon payment and do not clear the arrears after 2 months, you risk the tenancy being terminated. If you breach the tenancy, your right to purchase the house will be lost.
These are the same risks that would apply to a normal purchase, but your lawyer will discuss these aspects with you.
Okay, I am interested! But do you allow pets?
Rent to Buy is not like renting where you have to ask the landlord if you can put up a picture! Once you have agreed to take one of our properties it becomes your home. If you have pets, that’s absolutely fine – and better still, you don’t even have to ask our permission. All we ask is that they are house trained.
Many people choose us because they cannot find a quality rental property that allows them to keep pets. We love pets and believe that they help make a home a special place.
We'd love to help you to own your own home. We are offering our web customers first choice on all our Rent to Buy properties so make sure you fill in this simple form and we will notify you as soon as we receive a new property.