A Rent to Own tenant
A Rent to Own tenant doesn't own their home. They are a tenant with a tenancy agreement. Rent to Own Co-Ownership buys the property selected by the Rent to Owner and rents it to them for a market rent. The tenant has an option to buy at the end of a three-year fixed term.
Qualifying for Rent to Own
To buy a property or become a Rent to Own tenant, you need to show that:
- you can make payments
- you don't have an alternative route into home ownership
How do I Rent to Own sets out the criteria you need to meet to become a Rent to Own tenant and should be read before making an application. There will be a non-refundable assessment fee of £100 on application.
At the start of the tenancy
You pay a tenancy deposit (equal to one month’s rent) plus a down payment of £2,500.
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.