First-time buyers are facing considerable challenges trying to get on the property ladder. Whilst the number of mortgage products available to them has almost trebled since June 2009, many still feel stuck and unable to overcome two major hurdles to home ownership:
- Getting a substantial deposit together.
- Meeting the strict criteria set by banks after the Credit Crisis.
Rent to Buy (also known as Rent to Own) provides hope, however.
The Mortgage Market for First-Time Buyers
Louise Holmes, spokesperson for Moneyfacts.co.uk, said this recently:
“First-time buyers are often considered to be the life-blood of the housing market. As well as high mortgage rates, many borrowers have found it incredibly difficult to find funds for large deposits, often entirely beyond their financial capabilities.
“Higher loan-to-value mortgages have made a return to the market over recent months, suggesting lenders are taking positive steps to help the first-time buyer market. In fact there are currently 31 deals with 95% loan-to-values, an increase from just six deals in June 2009.
“These positive figures should offer some hope to those who dream of owning their own home.”
So the banks do seem to be willing to work with first-time buyers to some extent. But is there another way for first-time buyers to get started on the property ladder?
Does Rent to Buy Provide a Better Way For First-Time Buyers?
Rent to Buy, which uses a lease option, allows a First-Time Buyer to rent now and buy later. It gives you all the advantages of home-ownership without the headache and pressure of securing a mortgage right now. Imagine the advantages Rent to Buy offer a potential home-owner:
- As a “tenant buyer” you can make the house your home from day one, you have more freedom and more security than with a usual assured short-hold tenancy.
- If your option to buy is used (or exercised) and the home is bought later, any improvements you have made as the tenant-buyer benefit you, and not the seller.
- Rent to Buy allows you, the first-time buyer, to build a healthy, larger deposit, meaning you get more equity in the property and lower rates on your mortgage
- You can scour the mortgage market for the best deal, and pounce when you decide when you are ready, instead of being forced or rail-roaded. Buy when you want to buy.
- Rent to buy allows time for a change in your circumstances – such as an increase in income.
- Rent to Buy is a try before you buy approach – you can still walk away if you change your mind.
- Rent to Buy allows you, the tenant-buyer, to iron out wrinkles in a crumpled credit file, and increases your chances of getting good, cheap finance when you’re ready.
Lease Options Made Simple and Rent to Buy
If you are a first-time buyer looking to get on the property ladder, why not invest in a copy of our Lease Options Investor Handbook? You can find out more by clicking here. This resource takes you step by step, in simple, plain language through the Rent to Buy Process, including how to uncover and secure your dream home. The Lease Options Handbook shows you how to make your new home affordable, and your dream achievable.
You can find Rent to Buy homes through your local estate agents, or by contacting a seller directly. Using Rent to Buy can save you thousands of pounds, years of lost time and missed opportunities. Even if you don’t have a large deposit today, or need to sort out a blip on your credit file, why wait? You can start making your dream of home-ownership a reality today. This is a perfect way to start on the property ladder and get settled in your own home – with no mortgage needed!
At Lease Options Made Simple we also work with other investors across the country who own property they are willing to sell to first-time buyers (and others) on a Rent to Buy basis. We can put you in touch. We can also help you secure your dream home by working with you, whether you are a first-time buyer or not.
Why not contact us by clicking here and see how Rent to Buy and Lease Options can benefit you?