Rent to buy

marksesum

Hello,

My wife and I are looking at acquiring a property through the 'rent to buy' system.

We are totally unfamiliar with this and wondered if anyone had experience of anything similair?

Below is an email I have sent to the agent. We are still waiting for a reply but if anyone could clarify any of the points in the meantime it would be much appreciated.

Many thanks in advance.

Email to agent:
Good morning Kerrie,

Having viewed the property yesterday and having discussed it with my wife, we are very interested in moving forward down the rent to buy route. However, we would appreciate your help to clarify a few issues. I remember you said that the rent to buy side wasn't really your department so if you could please forward my questions on to the relevant person it would be much appreciated. Our questions are as follows;

Can we buy the property at anytime or only at the end of the 5 or 10 year periods?

What is the name of the company that would hold our deposit payments in trust? How is our money protected if this company goes bust?

What would happen should the landlord or his company go bust? or should something happen to him and ownership change hands?

What would happen if the landlord defaults on his mortgage?

What type of tenancy / leasehold would we be entering into during the initial 'rent' period before we buy?

Would it be possible to get a written confirmation of our costs from yourselves?

Would it be possible to view a copy of the rent to buy agreement we would be entering into?

Finally, is the purchase price negotiable in anyway? My wife and I feel that based on recent house sales in the area and the substantial amount of work required, the property is slightly overpriced at £109,950.

Please let me stress that we are extremely interested in this property as it would be perfect for our family, we are simply trying to get a full understanding of how rent to buy would work and look after our best interests.

BitterAndTwisted

I would take the view that a conventional "rent-to-buy" scheme is called a "mortgage". Any other schemes presented by estate-agents or any other entities is likely to be a scam with absolutely no guarantees that you'll ever get to own anything.

Is there a reason why you can't or won't apply for a mortgage through the normal routes?

carefullycautious

I would think you would need to pay a solicitor to find out the ins/outs of this scheme.

Which will be pricey to find out it is some kind of scam.

marksesum

We have been advised that we do not have a big enough deposit to buy. The last house we were interested in was valued at 70,000 and we had around 10 percent. The broker basically told us no chance.

I am self employed and have never had any line of credit before as I simply didn't need it when I was younger. I worked, paid my bills and whatever was left I spent or saved. When it came to buying a car, holiday etc. I saved and paid cash. How naive I was! As such my credit rating is average at best.

My wife, although having had credit cards, loans etc. has never defaulted or missed a payment. She did however, take out a debt management plan to reduce her monthly payments, which has now wrecked her credit rating. We were obviously not told this would happen by the chap who sold her it.

We are currently private renting but we have 2 daughters and really want to put down roots and give them some stability. There are quite a few rent to buy properties in our area (west yorkshire) being sold by various agents, of course I'm aware that doesn't mean its not a scam!

The site wont let me post links but the info I have is from 2 sites:

renttobuy.co.uk and nationalpropertygroup.co.uk

BitterAndTwisted

The only sensible way to buy a property is to get rid of every single debt you have and to save, save, save. Being on a DMP will severely curtail any chances you have of acquiring a mortgage until you are debt-free, and have been debt-free for some time: that is also the only sensible route to providing financial security for your children. Even for people who don't have debts or a DMP the solution is the same: savings. There are no short-cuts. Rent-to-buy via any route other than a conventional mortgage will most likely not get you what you want and is extremely likely to either be a scam or much more expensive long-term.