Special purchase price for existing tenant?

gazfocus

When we were marketing our house for rent we had one couple ask about whether we could do a deal where they could buy the house at some point in the future at a discounted rate because of being tenants. This has got me thinking.

Is this something that's doable? Where would I stand if say I had tenants paying me £600 per month and mortgage costing me £400 per month and if in say 5 years time they wanted to buy the house and I was to give them back £100 for each month they paid rent towards their deposit. Is this something a mortgage lender would frown upon?

This is just me thinking out loud and nothing has ever been mentioned with our current tenants but I just thought it might be a good way of helping people onto the property ladder.

xylophone

https://www.sheffieldforum.co.uk/showthread.php?t=787498

Something along the lines of what is proposed here?

kingstreet

If you wish to do so, you can offer your tenant a price below market value and the tenant can use that price reduction as part of their deposit.

The lender's surveyor has to value it up, though.

It's similar to the concessionary purchase facility for family members which can also be used for sitting tenants.

Not all lenders offer this.

nonnatus

We looked into this once! There is an agency called Ewemove who have a scheme called Rent to Buy or something similar. The tenant signs a different kind of lease and every month pays extra money into a "deposit" account.
They get 10 years to buy the property, in the mean time, they live in it as if it was THEIRS, so they can throw money into decorating it and making it a permanent home etc.


I forget how it pans out if the tenant decides NOT to buy the house in the end, but it might be worth looking into....?

gazfocus

Thanks for the quick responses

xylophone wrote: »

https://www.sheffieldforum.co.uk/showthread.php?t=787498

Something along the lines of what is proposed here?

Something similar but not exactly the same. I was thinking that the tenant pays to going rate and we sorta split the 'profit', so say there's a £200 profit each month, I get £100 and £100 goes towards a deposit fund for the tenant.

I would still take responsibility for the repairs, etc, but in turn the purchase price would be based on the value of the house at the time of purchase.

kingstreet wrote: »

If you wish to do so, you can offer your tenant a price below market value and the tenant can use that price reduction as part of their deposit.

The lender's surveyor has to value it up, though.

It's similar to the concessionary purchase facility for family members which can also be used for sitting tenants.

Not all lenders offer this.

Thanks, I'll look into the concessionary purchase facility.

nonnatus wrote: »

We looked into this once! There is an agency called Ewemove who have a scheme called Rent to Buy or something similar. The tenant signs a different kind of lease and every month pays extra money into a "deposit" account.
They get 10 years to buy the property, in the mean time, they live in it as if it was THEIRS, so they can throw money into decorating it and making it a permanent home etc.


I forget how it pans out if the tenant decides NOT to buy the house in the end, but it might be worth looking into....?

Thanks. I'll look into this but it does sound similar to the post linked to above.

I won't lie, it would be a way of guaranteeing rent for a certain amount of time but I do believe it would be a huge benefit to ftb'ers.