Finding it Difficult to Get on to the Property Ladder?
Many people find it difficult to get on the property ladder and this is usually for one, or more of the following reasons:
- You are new to the country and don’t have a credit rating (Foreign National)
- You have an adverse credit rating and can’t secure a mortgage offer
- You are struggling to save for a deposit
- Your Landlord is selling and you would like to stay in your home, but you can’t get the money together quickly enough to make the purchase.
What is Tenant Buyer or Rent to Buy?
The concept of Tenant Buyer, or Rent to Buy aims to alleviate the issues of having a poor, or no credit rating, struggling to save for a deposit, or your Landlord selling the home you are living in.
Tenant Buyer, or Rent to Buy gives a Tenant the option to buy the home they are living in over a set number of years.
Tenant Buyer, or Rent to Buy gives a Tenant the option to buy the home they are living in over a set number of years.
Process - Tenant Buyer or Rent to Buy
Consultation
A prospective Tenant Buyer contacts Vidazone Property Services and tells us what they are looking for and how much they can afford.
Property Sourcing
The Tenant can help Vidazone Property Services search for a house they would like to buy and once found we will negotiate the purchase.
Sale & Tenancy Agreed
After agreeing the sale with the Vendor, a future purchase price will be agreed with the Tenant. An Option Consideration is put down by the Tenant and this is placed in to a protected account on their behalf (this is typically 5% of the agreed Tenant purchase price, but a lower amount can be negotiated).
Over a 5-7 year term, the Tenant will pay their rent and an additional monthly top-up which is added to the Option Consideration. The aim being, by the end of this period they have saved a 10% deposit which will allow them to secure a mortgage on their home.
Over a 5-7 year term, the Tenant will pay their rent and an additional monthly top-up which is added to the Option Consideration. The aim being, by the end of this period they have saved a 10% deposit which will allow them to secure a mortgage on their home.
The Tenancy
Apart from the ongoing savings being made each month and the future purchase in ‘x’ number of years, the Tenant lives in the property under the same agreement they would do for any other rented home. Failure to look after the property will result in repair charges being levied, and their tenancy can be stopped should they fail to pay the ongoing rent.
The Purchase
Once the 10% deposit has been saved the tenant can secure a mortgage. Vidazone Property Services can recommend a Broker to talk to, or the Tenant is free to engage their own mortgage provider. On completion, Land Registry is updated and the tenant becomes a property owner. Congratulations!
Ongoing Ownership
Vidazone Property Services have no further involvement once the Tenant has purchased their home. They are subject to the same obligations as any other buyer and must keep up their mortgage repayments. If difficulties arise, they must talk to their mortgage provider and not ourselves.