This crops up a few times a year and I cant believe it is not something we have written about before!
With a lot of what is going on in terms of Renters Rights act, tax changes, mortgage rates and many other things, a lot of landlords are selling up. This creates an ideal opportunity for renters.
Many landlords give first refusal to their tenants.
This works well for landlords as it means they avoid estate agency fees and there is no void period where the tenant moves out. It also removes the risk of tenants refusing to move out and completion not being able to take place – plenty of pros for a landlord!
However it also works well for tenants as they do not have to worry about moving, finding a new home and of course it means you can start to pay off your own mortgage rather than your landlords – it can be a case of win/win.
Deposit requirements
Invariably, the biggest issue tends to be deposit – or lack of. Because landlords tend to not give much notice most people do not have a deposit in place. Some might be able to get a gift from family, but even with that it might not be enough.
If the landlord is prepared to give you a discount (they are saving on estate agents fees for example) then that can count towards the deposit.
eg:
£200,000 purchase price.
£ 10,000 deposit needed as minimum, this would be 5%.
£ 5,000 discount by the landlord means you then "only" need to find £5,000.
Or
£200,000 purchase price,
£ 10,000 deposit needed as a minimum.
£ 10,000 discount by the landlord - which means no money down for the tenant/buyer.
Affordability
Some lenders will look at the rent you have been paying and use a percentage of that as evidence of affordability. However, most lenders will still need you to pass normal affordability rules.
As a general rule of thumb most lenders will go to around 4.5x to 5x income. However some will go up to 6x or 7x income however there are requirements with those (professional careers or higher incomes for example) and they generally come at a premium.
But as we are whole of market with access to over 80 mortgage lenders we can certainly help you to explore your options.
How can we help?
As you can see above, this is something we have dealt with before and have done over many years.
We can help navigate lenders who are flexible with the deposit as it is certainly not for every lender if you are using a discount towards the deposit.
Get in touch and lets have a chat about your circumstances. We can see what is achievable.