Renting to Buy

[bmw156]

Talk to me.

any info, any experiences.

many thanks

[Stuart]

you mean buy to rent? lol

[bmw156]

you mean buy to rent? lol
no rent to buy!

where you rent a property for 5 years, and at any point you can buy it.

reduced rent for those 5 years in order for you to save for a deposit

[Jon_nova1]

what are you wanting to know

google "shared equity"

[bmw156]

if there are any hidden catches to it.

i am currently googling rent to buy, and have found out some info.

there are loads of different schemes which vary on terms etc.

your shared income has to be between 21k and 60k. ( so me and kelly are not there yet :( )

and some of the schemes, let your first year of rent be your deposit. which seems excellent to me.

[Stuart]

tbh all the schemes are short term great, but long term a 'con'/royal pain in the ass. One years rent wont exactly get you a massive deposit either :(

We looked into a semi similar scheme of part buy part rent and the loops you had to jump through to actually buy more of the property or even sell up were plain stupid.

[bmw156]

on the surface i cant find any negatives.

you pay rent, and agree a value to buy.

then at any point in the 5 years, you get the chance to buy. or get a mortage.

[Pistol Pete]

Me and the misses looked at this a few years back before buying outright in the end. IMO i wouldnt bother. Save wha you can for a deposit. Part rent part buy schemes are all well and good, but when i worked it out we would have been paying what we are now!!! By all means do the research, but think long and hard about it.

The thing is IIRC the government own the other half (well, they did on the scheme i was looking at). Whats to stop them upping the price, in relation to current market value, of the part you wish to buy when you have a mortgage.

If you could/can get a mortgage to buy part of it, why not just do that from day 1?

[Jon_nova1]

I'm sure if/when you come to buy more of a portion of the property the price is based on the market at the time.

It depends on your own circumstances, the pros are you can live in your own property and effectively be on the first step of the ladder, the cons are you have to pay rent

right at this moment in time, if your looking to rent anyway, it may be better to get a shared ownership/equity, as house prices are at a low, just make sure the house price isn't inflated, and this would be based on the fact you can't afford to take out a full mortgage

keep in mind if you come to sell and don't own 100% of the property the mortgage company will take what they owe, followed by any secondary security, then you get whats left

also note a part shared scheme is considered a secondary security, so some mortgage companies won't cover it

[Stuart]

Also as its part owned by authorities they will decide who can buy the property rather than you.... infact you will have to apply for permission to get into the scheme anyway. Its all rather contrived.

[Jon_nova1]

Its not owned by authorities in all cases, some are part funded by the developer, this is the part you need to be careful of with inflated prices