Rent to Own scheme
A Rent to Own tenant doesn't own their home. They are a tenant with a tenancy agreement. Rent to Own buys the property selected by the Rent to Owner and rents it to them. The tenant has an option to buy at the end of a three-year fixed term.
At the start of the tenancy
You pay a tenancy deposit (equal to one month’s rent) plus a down payment of £2,500. There is an application fee of £100.
During the tenancy
You pay a market rent, the same amount every month for three years,
with an option to buy any time after the first year.
At the end of the tenancy
You get your down payment back, your holding fee and £20.00 refund for every £100 paid in rent. This should work out at around five per cent of the property value at that time, to use as a deposit against a mortgage.
Qualifying for the Rent to Own scheme
There are criteria for an eligible property to buy under the scheme and criteria for potential Rent to Owners. You need to show:
- you can make payments
- you don't have an alternative route into home ownership
- Rent to Own