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Rent to Buy from Private Landlord

Hi there


Im after some advice. My partner and I have been tenants in our current property for a year. Our landlord phoned us up and asked if we would be interested in buying the property.


However, due to debts in past, we aren't in the position to get a mortgage etc due to very poor credit scores. We explained we weren't in a position to do this and he has said well let me know how much you could afford to give me a month and we can work something out for you to own the property


Apparently he has done this in the past with previous tenants. But im not sure how this would work. Would it be something to consider, depending on lawyers looking over agreement etc? Or are we best staying away?


Every one I have asked doesn't think of it as a good idea and worried we will be scammed. But I couldn't see us getting on the property market any other way


All advice welcomed. Thanks

Comments

  • davidmcn
    davidmcn Posts: 23,596 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    clare1510 wrote: »
    Apparently he has done this in the past with previous tenants. But im not sure how this would work.
    Well, ask him to explain to you what he's proposing. And then come back here and tell us what he said.

    The safest way from your point of view would be similar to a "normal" mortgage i.e. you get ownership now in exchange for some form of down payment and a promise to pay him £x per month. But why would he be any happier with your credit record than a normal lender?
  • Guest101
    Guest101 Posts: 15,764 Forumite
    So presumably you'd pay £x rent and £y 'equity'?
  • It looks like he is proposing a let to buy, but you need to be very, very clear about what you are getting into before you start down this route. You are going to need to get a contract and involve lawyers to make sure that the contract is fair to all parties.

    It's not out of the question, things like this have worked for people in the past, you just need to be very careful and very clear about what both you & your landlord expect.
  • what LL is proposing seems to be a sale via owner-financing.

    It's not something that happens much in the UK but reasonably common in some countries.

    You need to get all the legal ducks in a row, you can't just do this by amending the rental agreement.
  • Cakeguts
    Cakeguts Posts: 7,627 Forumite
    Sixth Anniversary 1,000 Posts Name Dropper
    This can be a legal nightmare. The problems start with who owns the property while you are in the process of buying it. With a normal mortgage you don't buy the property from the bank or building society you get a loan from them to pay the seller. In this case you are paying the seller in small installments so if you stop paying can the seller just repossess the property like a car on finance?

    Will you still be paying rent and then paying for the house in installments on top of the rent? What happens if you get to the point where you can no longer afford the extra installments? Who keeps what you have already paid? Do you get that money back?

    As I understand it rent to buy in the US is banned in several states because it is not a good deal for the buyer and the buyer often looses a lot of money in the process.

    The people who are attracted to this idea are always people who have bad credit and debts who wouldn't normally be able to get a mortgage and it tends to end in disaster because those are the very people who can't afford to keep up the payments.
  • Marvel1
    Marvel1 Posts: 7,359 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    What happens if you wish to move in the future?
  • Gigervamp
    Gigervamp Posts: 6,583 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    And what happens if the landlord's circumstances change and he needs the money from the house quickly?
  • Hi,
    Were there any developments with this? Did you decide to investigate it further?
  • Comms69
    Comms69 Posts: 14,229 Forumite
    10,000 Posts Third Anniversary Name Dropper
    MrJW wrote: »
    Hi,
    Were there any developments with this? Did you decide to investigate it further?
    Realistically these schemes almost never work.
  • davidmcn
    davidmcn Posts: 23,596 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    MrJW wrote: »
    Hi,
    Were there any developments with this? Did you decide to investigate it further?
    The OP doesn't appear to have logged in since March.
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