FAQs

Do you have a guide that explains rent to buy?

Yes - You can view our guide here >> RENT TO BUY GUIDE

No mortgage is required to move in. So how do I buy the house?

When you move in, you do not need a mortgage. You don't need a large deposit and you don't have to worry about getting approval from a lender. You have up to 5 years to buy the house at the fixed price. If for whatever reason you are not ready to buy after 5 years, the agreement continues up to a maximum of 10 years. Only when you buy will you will need a mortgage. This is why the scheme works so well. This time allows your deposit to build to a level where (subject to status) you may be able to get a mortgage from a high street bank who will typically require a 10% deposit. Our "Rent to Buy" plans are designed to allow you to build up this level of deposit while you enjoy living in your new home.

Is Rent to Buy a Government approved scheme?

It's a private sector initiative which has received the support of Grant Shapps, the Government's Housing Minister. He has expressed his backing for the scheme because it addresses the current challenges of the housing market.

What is the difference between buying in the first 5 years, or up to year 10?

The scheme has been designed to enable people to build up a sufficient deposit in the first 5 years (10%), because most people want to own their house sooner rather than later. For certainty we fix the price and rent. Given that rents can increase by 5% each year, this gives you a massive saving over the fixed term.

However, we appreciate that life is not always predictable and you cannot be 100% sure if you will be in a position to get a mortgage at year 5. For this reason, our agreements provide that you can buy the house at any time up to 10 years. This means that you can proceed with greater peace of mind.

The only difference is that after the first 5 year fixed price term, we share any house price growth with you. So you get ALL growth for the first 5 years and we share any growth with you in the remaining 5 years.

Example (based upon a fixed price of £100,000);

If prices rise at an average of 5% each year, after year 5 the value will be £125,000 but you can buy at any time for £100,000.

If you decide to wait until year 7 and house prices have gone up 10% between year 5 and 7 (or £10,000), we share this with you so you only have to pay £5,000 more.

So at year 7, the house is now worth £135,000 and you can buy it for £105,000.

House price increases are based upon government indexed regional data as reported by HM Land Registry and published monthly here; www1.landregistry.gov.uk/houseprices/housepriceindex/report/

The price is fixed from when you tell us you want to buy and it is valid for 90 days allowing you plenty of time to complete.

After the first five year period, you continue to pay rent and your top up deposit as normal. This means that you will have an even bigger deposit fund when you come to buy.

What if I can't get a mortgage?

Given that you have 10 years to buy the house, you have plenty of time to arrange a mortgage.

However, if this was the case you have a number of choices. You could;

Sell the house on and make a profit based upon your equity and any increase in value - Our recommended option
Walk away. If you did this you would lose any deposit or gifted deposit benefit and the trust account

Is it true that I can still sell the house at any time for a profit?

Yes! That is one of the best features of this scheme. You get all the benefits of home ownership, without needing a mortgage. So as your deposit grows and if house prices increase over time, you can sell on and release the equity and start moving up the housing ladder. Your days of paying dead money for rent will be over.

What happens if house prices fall over 10 years?

In the history of the housing market there has never been a period where house prices have dropped over a 10 year period (source Nationwide data recorded since 1952). However if they did, you will have hopefully built up enough equity to still put you in profit. Should there be a serious price correction in the housing market, you can simply walk away without any obligation. Latest house price index information can be found here: http://www.nationwide.co.uk/hpi/

Why don't you refund the deposit if a buyer does not complete on a purchase?

We are looking for people committed to buying our houses. We have provided an affordable scheme and the seller benefits from the certainty of a sale at a fixed price. However, they pass on all the benefit of any house price growth to you. Just like someone who is buying a house with a mortgage cannot ask their lender for the deposit back if they want to move, it is only fair that the same principal applies to our rent to buy legal agreements. However, as with a normal purchased property, you can sell to release any equity.

How is my deposit protected?

Your property is managed through our letting agency, www.nationalpropertygroup.co.uk which is a member of ARLA and subject to their codes of practice and rules in respect of deposit monies. The deposit money is not paid to the owner, but retained by National Property Group in a separate Trust Account. This is insurance protected by ARLA making the deposit completely safe and this operates in the same way as ABTA cover for holidays. The scheme provides you with insurance protection for your deposits paid up to a maximum amount of £25,000.

Please open the attached Guide for full details >> Client Money Protection Guide

When you complete the purchase, the money is paid to your nominated solicitor. If for whatever reason the owner did not complete the sale (and remember, they are legally contracted to do so), the Trustees are legally contracted to repay the money to you in full. This is extremely unlikely, but would cover such eventualities as the seller dying, going bankrupt or defaulting on their mortgage which prevents a sale. If you walked away from the property, or failed to complete on the purchase, the Trustees would pay the monies onto the owner.

What happens if somebody dies before the house is purchased?

Morbid, we know, but our lawyers think of everything!

If it's;

The Landlord; The agreement will continue and will be completed by any surviving landlord or their estate. As such it will not affect the Rent to Buy agreement at all
The Tenant(s); The agreement will continue to be completed by the last surviving tenant. Upon the death of the last surviving tenant, all payments held in the Trust Account will be repaid to the Tenant(s) respective estates in equal shares

Is interest paid on my deposit?

No. The interest on deposit accounts is currently negligible. Any interest that is earned on the deposit is used towards administering and auditing the scheme, together with the Insurance protection that we put in place.

How does the legal process work?

When you buy a house the traditional way, you exchange contracts. This is when both sides are legally committed to the sale and purchase. You then agree a date for "completion" - the exciting part when you get to move in.

With "Rent to Buy", you enter into a legal contract in the same way, except "completion" (the point when the house is signed over to you and the monies are paid), is extended to the agreed number of years on the "Rent to Buy" contract (up to 10 years). However, you can move in straight away. The seller is legally committed to sell the house at the fixed price. They cannot back out, change their minds or revise the price. However, you may walk away if you decide that for whatever reason you do not want to proceed.

We retain our own Compliance Consultant to ensure that all of our literature, brochures and documentation are clear and not misleading. Our operations are fully compliant with "Treating Customers Fairly" requirements. The Rent to Buy scheme does not constitute an agreement which is subject to any current FSA regulations.

So if house prices double, will you try and change the price?

No! Under the legal agreement the price is 100% fixed for 5 years! After 5 years we share any further growth with you. Your lawyer will make sure that all the legal contracts confirm that the price is guaranteed. So you get the benefit of today's price and hopefully many years of house price growth all to yourself!

Who carries out maintenance to the house?

It is your home now and for you to decorate or improve as you please. We only ask that you seek the owner's consent if you carry out any works of a structural nature requiring planning or building approval. And remember, you benefit from any increases in the value of the property as a result of any improvements. The seller will carry out an annual gas safety check and pay for public liability insurance cover. You cover other maintenance costs and utility bills as you would normally do when you own a house. You need to take your own buildings and contents insurance for your possessions.

What happens if I can't pay the rent?

Just like any other agreement it is your responsibility to pay the rent and monthly deposit top up. If you get into any difficulties, you should contact the seller to agree a proposal for payment. Just like any normal mortgage or tenancy, your home is at risk if you do not keep up your repayments. If you default upon payment and do not clear the arrears after 2 months, you risk the tenancy being terminated. If you breach the tenancy, your right to purchase and any gifted deposit will be lost. These are the same risks that would apply to a normal purchase, but your lawyer will discuss these aspects with you.

Okay, I am interested! But do you allow pets?

Of course.

Rent to Buy is not like renting where you have to ask the landlord if you can put up a picture with blue tac. Once you have agreed to take one of our properties it becomes your home. If you have pets, that is absolutely fine - and better still, you don't even have to ask our permission.

Many people choose us because they cannot find a quality rental property that allows them to keep pets. We love pets and believe that they help make a home a special place.