Part Buy Part Rent

lucy_w86

We are looking into using the part buy part rent scheme as my partner and I will struggle to buy normally.

Has anyone used these schemes?

ehs_3

Hi Lucy

Take care with these. You will often have to pay a large non-refundable lump sum which you won't get back if you don't end up buying for whatever reason. You will probably also be asked to pay a higher than normal market rent.

I have also heard tales of these in the USA where they go under the name of "Lease To Buy" and a renter has paid $10,000 to get the right to buy the house they are renting and then the landlord has defaulted on the mortgage. In the end, the tenant is evicted when the property is repossessed and loses the lump sum payment with no come back.

With prices flattenning maybe you should consider bargaining hard on the rent and looking around as much as possible and then saving the rest of the money. Just a thought to consider.

These schemes set up to help people buy property often turn out very expensive.

pickles110564

lucy_w86 wrote: »

We are looking into using the part buy part rent scheme as my partner and I will struggle to buy normally.

Has anyone used these schemes?

Im always a bit worried by schemes, they will not be doing it for the buyer.
They must be able to make more in the long run or hope that you will default so they can get the house back and then start again with someone else. They must be in a win win situation.

where2start

Hi was reading your thread and we too are also considering buying a house on the shared ownership which is part buy part rent , dont really know if its a good idea but how else does one get onto property! we trying to find mortgage for this but two minded whether its the right thing to do buying with a housing association

Bargain_Rzl

As there are two almost identical threads on this at the moment, perhaps you could join this one instead: http://forums.moneysavingexpert.com/showthread.html?t=475633

Richard_Webster

ehs wrote: »

Hi Lucy

Take care with these. You will often have to pay a large non-refundable lump sum which you won't get back if you don't end up buying for whatever reason. You will probably also be asked to pay a higher than normal market rent.

I have also heard tales of these in the USA where they go under the name of "Lease To Buy" and a renter has paid $10,000 to get the right to buy the house they are renting and then the landlord has defaulted on the mortgage. In the end, the tenant is evicted when the property is repossessed and loses the lump sum payment with no come back.

With prices flattenning maybe you should consider bargaining hard on the rent and looking around as much as possible and then saving the rest of the money. Just a thought to consider.

These schemes set up to help people buy property often turn out very expensive.

I suspect that a Housing Association Shared Ownership Scheme was what was being referred to here and NOT the kind of scenario mentioned above - as Bargain Rzl says - have a look at the other post refrred to. Also note that there may be detailed differences between England/Wales and Scotland in how these schemes work.

As a conveyancing solicitor I believe the information given in the post to be useful but I accept no liability except to fee-paying clients.

gabyjane

Hi we have secured one this week, i will reply more on that other thread!

ehs_3

Richard_Webster wrote: »

I suspect that a Housing Association Shared Ownership Scheme was what was being referred to here and NOT the kind of scenario mentioned above - as Bargain Rzl says - have a look at the other post refrred to. Also note that there may be detailed differences between England/Wales and Scotland in how these schemes work.

As a conveyancing solicitor I believe the information given in the post to be useful but I accept no liability except to fee-paying clients.

Yes on closer inspection it does sounds like it's something more like a shared equity scheme which are unikely to have any risk of the landlord going bust as the owners are normally housing associations. These can offer some good deals as the part rent is often at a very low level when compared to market rent. My concerns were where these right to buys were being offered by a private landlord and where a large up-front non-refundable deposit is required.

Regards shared equity, there are a lot of hoops to jump through though, and the government is only keen to subsidise as little as possible. You will need to declare all your income and you will be expected to purchase as much equity as you can "afford". There can also be extra charges which kick in after 3 years if you don't either buy out the remaining equity or move on to somewhere else. The charges can start at 1 per cent and increase by 1 per cent up to about 3 or 4 per cent each year.

They can be good as a relatively short term solution, but what I don't like (from what I've seen) is the extra charges which start to kick in after 3 years. You will also find that you can also sell your shared equity to someone who would qualify under the shared equity regs.

Good luck and hope it goes well Just be sure to check out all the details.

Nickysmadhouse

We are looking into the part buy part rent scheme in our area (which is notoriously highly priced!) I have gained some info from my housing association - i am a tennant. however there are a few things that i need answering and the peopl i spoke to just suggst i register my interest to gain more info, at this moment in time i would just like a heads up on it so, HELP!
1) I have been left by my grandparents a substantial amount of money - in the region of £60k i also have approx £10k in premium bonds, so i have a good amount to put down on a house - a new build 3 bed is going for approx £190k, would this be enough of a share to be considered for the scheme?
2) Whilst you rent the other portion of the house, does the scheme cover any repairs as with a normal housing association tennancy?
3) My credit rating isn't great! the tennancy i currently have is in my name only, if i proceed with the scheme, could i transfer that tennancy to my partner (good credit rating) or would it be advisable to include him on mine now so that he can be the 'main' tennant therefore he gets the credit checks??!!!
4) from above - is it possible to add someone to a tennancy?
5) If i am in a possition to buy the remainder of the house in future will i incur any charges i.e interest payments to the HA for buying the remainder?

Many thanks - Im confussed!!!

BexInLondon

Nickysmadhouse wrote: »

We are looking into the part buy part rent scheme in our area (which is notoriously highly priced!) I have gained some info from my housing association - i am a tennant. however there are a few things that i need answering and the peopl i spoke to just suggst i register my interest to gain more info, at this moment in time i would just like a heads up on it so, HELP!
1) I have been left by my grandparents a substantial amount of money - in the region of £60k i also have approx £10k in premium bonds, so i have a good amount to put down on a house - a new build 3 bed is going for approx £190k, would this be enough of a share to be considered for the scheme? Normally people who buy on these schemes have a much smaller deposit than that, and are buying with a mortgage. The problem you could face is that you might have too MUCH money! With that sort of deposit, you'd only need a combined income of £30k to buy on the open market, and these schemes are aimed at people who can't. You really do need to speak to them regarding their criteria though, as every HA will be different.
2) Whilst you rent the other portion of the house, does the scheme cover any repairs as with a normal housing association tennancy? No - if anything breaks (boiler, plumbing, appliances) you've got to cover the repair costs yourself. So you need to leave room in your budget to cover these potential issues.
3) My credit rating isn't great! the tennancy i currently have is in my name only, if i proceed with the scheme, could i transfer that tennancy to my partner (good credit rating) or would it be advisable to include him on mine now so that he can be the 'main' tennant therefore he gets the credit checks??!!! Do you mean the credit check for the mortgage or for the HA? In either case, if you're joint applicants they'll check you both! Having a bad credit rating might not make you ineligible, but it might mean you're excluded from some of the better mortgage rates.
4) from above - is it possible to add someone to a tennancy? It's not just a tenancy, it's ownership. So you need to be very, very sure that you want to commit to owning (part of) a house with someone. Your solicitor should talk to you fully about this.
5) If i am in a possition to buy the remainder of the house in future will i incur any charges i.e interest payments to the HA for buying the remainder? Depends on the scheme. If it's straightforward Shared Ownership, I shouldn't think so. However if you do want to buy more shares in the future prices may have risen so it might cost more than you think. On the other hand prices might drop more... who really knows? But no, you shouldn't have to pay interest.
!

Hope that helps!