Rent-to-buy schemes help first time buyers
August 30, 2009
The recent slow down in the housing market in the U.K. brought hope for many that they might just be able to afford their own home. Unfortunately mortgage lenders are now asking for enormous deposits that can be many times a person’s annual salary.
The U.K. Land Registry estimates the average price of a house in Britain at £153,046 and with lenders asking up to 40% deposits on mortgages this puts a person earning the U.K.’s average wage of £26,020 in a rather difficult situation.
Housing Associations throughout the country are countering this situation by introducing rent-to-buy schemes. These schemes allow people who wish to buy a home rent an affordable new-build for up to five years with an option to buy at the end of the period. This allows tenants the time to save up a deposit, or the market the time to become a little more friendly.
The schemes are backed by the government so rents can be cheaper than on other properties in the area. Some schemes return a percentage of the tenants rent so that it can go toward the deposit and some will sell the tenant as much of the property as they can afford to but whilst allowing them to continue paying rent on the remainder.
Thanks to www.timesonline.com for the above quotes, for more information on this article please visit their website.
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