Anyone heard of 'Let to Buy'?

[MrsGem]

We currently privately rent a house through a letting agent, but we speak to the actual landlord too and are on friendly terms with him and his son.

The house we live in was up for sale for a year before they gave up and rented it out. We absolutely love the house and know what things need to be done to bring it up to scratch and make it 'our' home.

One of my clients mentioned that it is a scheme where you can draw up a private contract between tenant and landlord called 'Let to Buy' where the Tenant becomes the owner and the 'rent' become payments towards the house.

This sounds amazing and we think our landlord would go for it as they live quite far away. The only issue is I can't find anything internet wise that isn't about new builds and this type of scheme.

Does anyone know about it?

[leclerc]

Re: Anyone heard of 'Let to Buy'?

Let to Buy is an alternative to buy to let, in which a let to buy mortgage product allows the borrower a lump sum of money to buy a new home to move into, whilst the existing residence is let out to tenants in the normal manner.

That is from another website which deals with mortgages. The Let To Buy is not what you have thought it was.

[MrsGem]

Re: Anyone heard of 'Let to Buy'?

Maybe the scheme my client thought of was called something else?

It's apparently all written up legally costing approx £1000 but the gist is that the ownership would revert to us and the 'rent' would become payments towards the house.

[missparker]

Re: Anyone heard of 'Let to Buy'?

There is a let to buy scheme in spain through Cam bank,and a company here in the Uk
if I can find the details I will let you know the UK companys name and they may know if such a schema is available in the UK

In spain you enter an agreement to rent a property for 5 years, if you decide to buy the property in the 1st year all money paid toward the rent is as payment toward the house purchase
but this is on houses repossesed buy the bank so owned buy the bank

good luck

[leclerc]

Re: Anyone heard of 'Let to Buy'?

I think the scheme maybe similar to rent to buy schemes but the rent to buy model seems to suggest that there is an option within the contract to buy the property at a specific amount. I would be careful to make sure that the agreement is legally binding on both of you because potentially the property value will go up over the term of the contract and that additional value would not be one that could be acquired by the seller so to speak.

[shamen]

Re: Anyone heard of 'Let to Buy'?

+1

A long time ago my (then) partner and I were offered something similar. The landlord wanted to sell the house eventually but it was in need of about 20k worth of repairs to get the proper market value. He offered us a rent to buy scheme where our rent went up £100 a month but that went towards purchasing the house and we would do the repairs once we bought it. Meaning after 5 years we would have £6000 discount off the property asking price which sounded ideal - would give us time to build credit towards a mortgage.

Myself and my partner at the time split after 2 years but i still hear from her now and then. Apparently after the 5 years ended the value of the home had gone up by about £10k so while the home was 6k less than the asking price, the asking price was still higher than what it was when the rent to buy contract was started. The golden rule there was that we should have had the asking price set firmly in the contract, but overlooked that in excitement of possibly owning our own place one day.

Additionally, the way the landlord had the contract worded meant that my ex had no equity in the home, so when she chose not to buy, the landlord happily took the keys off her, kept her deposit (scum!) and didnt give her a penny back of the 6k. I think she took him to court but dont know the outcome as Ive not caught up with her in a long time.

Ive heard such agreements can work if done right, specifically ensuring the contract guarantees you equity in the property and secures the sale price at the beginning of the contract. But still, they are risky at the end of the day - what happens if the landlords property is repossessed during the agreement for example?

[MrsGem]

Re: Anyone heard of 'Let to Buy'?

There is no mortgage on the property so repossession wouldn't be a risk.

SO if we were to try for it the contract would need to be explored thoroughly....

Food for thought. I'll have to ask my client where she got her information.

Thank you

[shamen]

Re: Anyone heard of 'Let to Buy'?

There is no mortgage on the property so repossession wouldn't be a risk.

SO if we were to try for it the contract would need to be explored thoroughly....

Food for thought. I'll have to ask my client where she got her information.

Thank you

You are welcome. If the property is mortgage free, it would be a good idea to ensure that any contract ensures the landlord cannot re-mortgage or secure anything else on the property during the period of contract