There are several schemes that can help you on to the property ladder if you are interested in becoming a homeowner. However, if you have not saved a high enough deposit to be able to purchase your dream home, then as a first-time buyer don’t fret! The Rent to Buy scheme is a popular option. This post will look at reasons why Rent to Buy could be the option for you.
What is rent to buy?
The rent to buy scheme is a new way to help people like you, eventually buy a home in the place you want to live. Rent to Buy is designed for people who are earning enough to qualify for buying a home through Shared Ownership, but have not yet been able to save enough for a deposit.
How does rent to buy work?
Rent to Buy is simple:
- Rent a brand new home you love, and get a 20% discount on your monthly rent
- Save as you go for a deposit, while enjoying your new home
- After two years, buy your home through Shared Ownership + get up to £5,700 cashback towards your deposit*
*Discover more on page 9 of the brochure
Is rent to buy a good option?
Rent to Buy can be attractive to buyers, especially those who expect to be in a stronger financial position within a couple of years. Check out the below pros and cons to see if Rent to Buy is the right option for you:
How long does Rent to Buy last?
The minimum time you must agree to rent with us is for six months, and the maximum you can rent before making a decision to buy your new home is two years.
Are there any upfront costs?
Before you move in, all you will need to pay is a deposit of five weeks’ rent. Unlike most rental properties, you won’t have to pay any other additional fees such as referencing. The deposit is refundable based on the condition of the property when you vacate and the time you have chosen to rent with us for.
Can you rent to buy from a private landlord?
When you choose the Rent to Buy scheme with Peabody, we will act as your trusted landlord for the 2 years you rent from us.
What is a Rent to buy mortgage?
For 2 years, there is no mortgage requirements on your new home, just monthly rent. If you choose to purchase your rent to buy property via Shared Ownership or another Peabody, new-build property after 2 years, then there will be a monthly mortgage cost.
How much does a Rent to Buy property cost?
The cost of your home will be fixed at today’s market price, as valued by an independent RICS qualified surveyor. This means if house prices have risen in two years’ time, you won’t be losing out. If house prices have gone down, we will honour the decrease up to 5% of the market value.
What are the benefits of Rent to Buy?
Peabody provide a 20% discount on your monthly rent, compared to other similar properties in the area, for the entire 2 years your rent from us, As an added incentive, when you buy your home after two years, we’ll give you 5% cashback (based on the share you are purchasing, to a maximum of 30% share)
Can I Rent to Buy with bad credit?
Unfortunately, you cannot rent to buy with bad credit. If you are currently renting somewhere, you will need to provide a reference from your current landlord to prove you have a good credit history.
Can I afford a Rent to Buy property?
The Rent to Buy scheme is designed for people who are earning enough to qualify for a Shared Ownership property, but earn less than 90K per household. To help you understand your finances and what you would be able to afford and save, we will arrange for you to receive free financial advice from an Independent Mortgage Advisor (IMA) on our panel of experts.
Is rent to buy London specific?
At Peabody the majority of our homes are London based. Rent to Buy is available on selected brand new Peabody homes in London.
What happens after 2 years?
Once the initial rental period is over, you should be in a position to buy your home through Shared Ownership, using a combination of the deposit you have saved and a mortgage arranged by yourself. If your circumstances change you can consider buying an alternative brand new Peabody home through Shared Ownership with a 5% cashback incentive, or you can buy a Peabody resale property (one that isn’t brand new) without a cashback incentive. If you choose not to purchase your Peabody home you will have to move out.
If you are interested in purchasing a Rent to buy house or apartment, register your interest in Peabody Sales and we will be in touch when we have any properties available via Rent to Buy.
Looking to buy a home soon? Check out our range of homes, available to purchase via Shared Ownership or London Help to Buy.Search Peabody homes