What is Rent to Buy?
We understand how difficult it can be to get a foot on the property ladder these days. Too often people are forced into completely changing their lifestyle or making big sacrifices, like moving away from family, friends and work, just to be able to save for a deposit to buy their own home. For many, the idea of ever being able to afford to buy in London feels out of reach.
Rent to Buy offers people the chance to rent a home at a lower rent (with a discount of 20%), for a period of 2 years, helping them save for a deposit over time to purchase the home through Shared Ownership.
How much could I save with Rent to Buy?
Rent to Buy is designed for people who are earning enough to qualify for buying a home through Shared Ownership, but have not yet been able to save enough for a deposit.
You can rent a home while saving for a deposit during the 2 years you're renting with us. See how much savings you can make to contribute to your deposit.
Example: 1-bedroom apartment
Minimum annual household income - £45,000
Cost of your home - £380,000
Reservation fee - £99
Five weeks' deposit - £1,270
Market value rent (monthly) - £1,400
Monthly rent you will actually pay (-20%) - £1,100
A 20% discount on your rent means you can build up savings of £7,200 in just two years.
Am I eligible for Rent to Buy?
Eligibility will vary depending on which development you are looking to buy in. However, there are some general criteria that you must meet for every development.
- My household income is not more than £90,000 a year
- I don’t own a property already
- I live or work in the area i am hoping to buy
- I am willing to agree with you a sustainable amount I am able to save every month whilst I am renting my new home
- I can afford the monthly Shared Ownership costs at the moment, but don’t currently have a large enough deposit to buy through Shared Ownership or outright
- I am able to show that I can obtain a mortgage based on my current credit report
- I am able to pass money laundering and fraud checks
- I am hoping to buy a home big enough to suit my current needs
- I am able to get a good tenancy reference from my current landlord
Buy your home with Shared Ownership
Once the initial rental period is over, you should be in a position to buy your home through Shared Ownership, using a combination of the deposit you have saved and a mortgage arranged by yourself.
Owning a Shared Ownership home, means you buy a share in the property and pay rent on the share you don’t own. You can buy as little as 25% or as much as 75% of the value of the property initially, and you’ll need to take out a mortgage to do this. Although you may be officially ‘renting’ a proportion of the home, legally you become an owner-occupier, not a part tenant.
Shared Ownership is a part buy/part rent scheme that makes it possible for first-time buyers to purchase a property with a smaller deposit compared to buying on the open market.
"We really wanted to stay in London and buying through Shared Ownership was the best way to make this happen. Everyone at Peabody New Homes was so helpful and very efficient, guiding us through each stage of the processes. From my initial phone call, they managed to book me an appointment for the following week. I was so impressed with the quality of the homes here."