Rent To Buy Is A Creative Affordable Housing Solution
In today's housing market both potential buyers and financing sources are scare
. The continued pressures of the housing market has increased the possibility of alternatives to those who prefer not just to rent a home with lease options know as rent to own.
This type of lease option is similar to a simple lease where tenants rents a house from a landlord and pays rent and other expenses as laid down in the lease terms and conditions such as council tax and utility bills. However, they also have the additional option of being able to secure certain terms for the future which entitles them to purchase the house in the future.
At the start of the agreement the tenant pays a deposit towards the option to purchase the property at an agreed price which is determined at the outset of the agreement. Basically the deposit is a form of credit towards the purchase cost if the tenant exercises the option at the end of the agreed term by being able to purchase the home. During the lease term monthly rent is paid in the normal way.
Rent to buy options enables affordable housing without having to find the hefty deposits required by lenders, whilst giving tenants the opportunity to get their foot on the first rungs of the housing ladder in an effective and realistic way.
There are positive aspects with rent to buy agreements for both the owner-landlord and the potential buyer. The owner-landlord has the financial benefits of monthly rental income, plus a deposit as well as securing a future potential buyer. The buyer-tenant is able to settle in the home they wish to buy with the knowledge and safety of having established a purchase price whilst having additional time to secure his/her financing.
For both parties there is the rights and responsibilities of renting during the lease option and of course the potential consequences should the tenant's purchase fall through for the owner-landlord and the forfeit of the deposit for the buyer-owner should they decide not to buy the property.
Rent to buy is a creative alternative for a seller and buyer that are having difficulty raising a large deposit in today's housing market and the ideal option for those who wish to buy property and yet either have a poor credit history or are unable to save for a large deposit.
To begin with all prospective buyer-owners will have to register with both a local HomeBuy agent and a Housing Association who belongs to the rent to buy scheme. The local agents work closely with the Housing Associations across England and Wales providing people with a housing need with a viable method of owning their own home.
Of course there are terms, conditions and qualifying criteria which has to be met, however rent to buy is for people who want to make the dream of owning their own home a reality in a secure monetary environment, the scheme is not for those who have the financial means to take the usual property route.