‘Rent to buy’ scheme launches to replace ‘Bank of Mum and Dad’

A scheme that helps those paying rent to buy their homes is going for full national rollout after successful trials across Kent, Surrey, Essex and the Midlands with property prices ranging from £150,000 to £400,000.

HomeNow is a rent to buy scheme that seeks to offer an alternative to the ‘bank of mum and dad’ as well as other more established purchasing options. Under the scheme would-be residents, or tenants, source the property they want to live in and then approach HomeNow.

VENDOR’S AGENT

Once HomeNow has approved the property, they will carry out the necessary negotiations with the vendor’s agent and proceed with the purchase; paying the stamp duty, legal and conveyancing fees, and then become the landlord.

The home, which would comply with all landlord obligations such as gas safety and electrical checks,  is then rented to them at a fixed price for a five-year period.

Residents then receive one third of the increase in the property price value during their tenure to use as a contribution towards the mortgage deposit.

FEEL LIKE HOMEOWNERS

Jonathan Potter (main picture), Co-Founder of HomeNow, says: “The idea is that residents should feel like homeowners as they are earning equity and ultimately, will hopefully own the property themselves.  However, they will still receive the equity if they don’t decide to buy.

“We are very keen that from the beginning residents should treat the properties as if they are the owners, that includes decorating and home improvements.

“We conduct annual inspections to ensure the property is being well maintained but other than that, the residents have full autonomy.”

Gareth Ship, HomeNow Chief Operating Officer, says a key advantage of the scheme is the security it gives over the five-year period.

He adds: “We firmly believe that the HomeNow scheme is reforming home ownership in the UK and in doing so, will contribute to a new generation of homeowners.”