A HELPING HAND

SAVING FOR A DEPOSIT MAY SEEM LIKE AN IMPOSSIBLE DREAM IN THE CURRENT CLIMATE, BUT THESE RENT TO BUY SCHEMES, WHICH CUT RENTAL COSTS FOR TENANTS, ALLOW THEM TO SAVE TO BUY THEIR DREAM HOME

Recentrises in the cost of living have made saving for a deposit to buy a property harder than ever. With spiralling rental costs and rising bills, buyers have less money to save at the end of the month, making it almost impossible for so many to go from renter to owner.

Frustratingly, mortgage repayments are likely to be a lot cheaper than rent – but being able to raise a deposit to get a mortgage in the first place is the biggest barrier of all.

Here we look at the Rent to Buy schemes designed give tenants the financial space to save for their own home and make homeownership achievable for working professionals and families alike.

Rent To Buy

Rent to Buy is the Government scheme that gives tenants the chance to rent properties at a reduced rate, allowing them to save for a deposit and eventually buy their own home through shared ownership. With Rent to Buy they pay a below-market rent – around 20% less than market rent. This heavily discounted rent means more of their salary can be spent on building savings.

Tenants can rent and save for an initial two-year period, though this can be extended if their savings aren’t quite ready after this time. Once they have enough for a deposit and are approved for a mortgage, they can buy any home in their budget through shared ownership.

Properties ranging from first-rung-on-the-ladder apartments to larger family homes are available across England (except London) and can be found via local council and housing association websites. Some private landlords also offer homes through the scheme.

Shared Ownership

Those who choose to buy a shared ownership home start by buying a share of the home (usually from around 10-25% with this scheme) so they will need a deposit to cover buying that share. Once they’ve bought part of the home and have a mortgage, they can increase the amount they own – up to 100% (full ownership) – at their own pace over the coming years.

London Living Rent Scheme

Anyone who’s ever rented in the capital knows what a financial stretch it can be. The London Living Rent scheme is the London counterpart of Rent to Buy, funded by the Mayor of London. It allows Londoners on middle incomes to live in a beautiful new build home with reduced rent for three to 10 years. Rents are offered at around a third less than prices in most London boroughs. It works with the same aims as Rent to Buy – tenants can use what they save on rent to save up and buy their first home through shared ownership. After three years, tenants are offered the opportunity to buy their home or carry on renting for up to 10 years, depending on how much time they need to save.

So Flexi

SO Flexi is the sister brand to SO Resi and will be offering homes under this scheme only for shared ownership and not through private sale. The brand will soon be marketing these homes, which will be featured on soresi.co.uk in the next couple of months – so do keep an eye on the website so you don’t miss out.

soresi.co.uk