Rent to Buy

The term ‘rent to buy’ covers a whole range of schemes offered by housing associations, where you’ll usually be offered an assured shorthold tenancy at a fraction of the market rate for rents in that area. This affordable rent gives you the chance to save up a deposit for the future. Then, after a prearranged period of time has elapsed, you’ll have the chance to use these funds to buy your rented home.

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Resale Price Covenant

Properties sold under this arrangement are becoming increasingly common in new developments. They stipulate that a proportion of any new housing constructed in a particular area must be sold at a reduced rate to certain qualifying customers. These are typically workers in key professions such as nursing or teaching, or may be individuals already living in the locality.

This initiative could benefit you if you’ve been a tenant of a local authority or a non-charitable housing association for at least five years. If you qualify for Right to Buy, you could purchase your home at a discount proportional to the length of time you’ve been a tenant.

Shared Equity

With shared equity schemes, you buy part of your home now, using a mortgage, and part of it at a later date with an equity loan. Because the equity loan is accepted as part of or instead of a deposit, you’ll be able to afford to buy without first saving up a large amount of capital. After a certain period, usually 10 to 25 years, the equity loan needs to be repaid in full: since it’s typically a percentage of the value of your home, the amount you’ll be required to pay will depend on your property’s value at the time the loan matures.

Shared Ownership

You may have heard of shared ownership in its guise of ‘part buy/part rent’. It’s a scheme where you can arrange to buy a percentage of your home—typically 25%-75%–and pay a subsidised rent on the balance. Most shared ownership agreements also allow for ‘staircasing’, where you can increase your ownership of the property over time until you own it in its entirety.

Social HomeBuy

Social HomeBuy has features in common with shared ownership, but it is intended for tenants already living in homes owned by local authorities or housing associations. Tenants are given the chance to buy a minimum of 25% of their home, with the remainder staying under the ownership of the landlord. As with shared ownership, staircasing is possible, with the tenant increasing the proportion of their holding until they achieve outright ownership.

Buying a home is a large commitment, whichever method you use to bring it within your reach. Our friendly mortgage advisers can assess your suitability for find the right deal on the market for you. So if you’re ready to get your foot on the property ladder, speak to one of our experts today.

Beside you all the way

At Zing, we’re here to help you throughout your mortgage application. From your first enquiry through to completion - we’re here to make the whole process easier for you.

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