Frequently asked questions
Who is this for?
Rent-to-own is open to everyone, but it’s particularly helpful if you are struggling to save for a deposit, have poor credit, are self-employed, or are new to the country. It's a way to rent a home while also saving up to buy it later. Even if you've had credit issues in the past, rent-to-own might still be an option for you.
Who is rent-to-own for?
Who is rent-to-own not suitable for?
Rent-to-own might not be right if you won’t be able to afford future mortgage payments, your job situation is uncertain, you receive housing benefits or you're bankrupt. After a financial check, we'll let you know if you're eligible. If you're unsure, talk to us.
Am I eligible?
What level of income is required to qualify for the scheme?
While there are no strict criteria, applicants must pass our affordability checks. These checks involve assessing your household income and monthly expenses so we can work out what you can afford to pay each month.
What information do I need to provide?
We will need the following information from you:
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Your household income
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Historical payslips to verify employment
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Split of household income if purchasing with a partner
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Number of dependants in your household
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Permission to source your credit score
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Previous landlord references, if applicable
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Bank statements and monthly expenditure details
How does it work?
We buy the property at today’s price and agree a future price for you to buy the property in five years. On average, house prices go up 4% year-on-year in the UK, so we work out the future price based on this.
Private investors put in 25% of today’s purchase price, while the rest is funded by a traditional mortgage. Your monthly rent covers the mortgage payments and part of the interest payments on the private investors’ money. The appreciation in the house value over the five years pays back the investors’ money plus interest, the initial purchase costs (including surveyor, mortgage broker, legal fees and stamp duty) and our costs.
For example, if today’s purchase price of the house you want to buy is £200,000, we would agree a future purchase price of £243,330. If the house appreciates more than this, the extra equity is yours to keep since the future price is locked in from the start. If the house has not appreciated that much, we may be able to extend the length of the rental term. Either way, you have the right – but not the obligation – to buy the property.
You can find a future house price rise calculator here: https://www.spvmortgages.co.uk/house-price-rise-calculator/
The commitment fee and monthly top-up fee go towards the 10% deposit required for a traditional mortgage. Our goal is to help you save up the deposit and become mortgage-ready within the five years.
When you buy the house, you will also need funds to cover purchase costs – mortgage broker fee, legal fees and stamp duty (for a first-time buyer this only applies if your house is over the stamp duty threshold of £425,000).
What are the steps I need to go through?
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Apply and get approved. The process is straightforward and quick. We will work out your affordability and give you a budget for your new home.
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Work with us to find your perfect home from available properties that are within your budget.
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Pay a commitment fee of 3%-5% of the purchase price of your chosen property. The commitment fee comes off the purchase price when you buy the property.
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We agree a price now for when you buy your home in five years. That way there are no nasty surprises, and you know what you’re working towards. Any increase in value over the agreed purchase price is yours to keep!
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Behomed will buy your home and pay associated costs, including surveyor, mortgage broker, legal fees and stamp duty.
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Fix your rent for the next five years with no annual increases. This fixed monthly payment includes market rent plus a top-up fee. The top-up fee comes off the purchase price when you buy the property.
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Live like a homeowner from day one. Decorate. Remodel. Bring your pets! Enjoy peace of mind; no landlord will ask you to move because they want the property back.
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After five years, you have the option – but not the obligation – to buy your home from us.
How much does it cost?
To get started, you'll pay a commitment fee of 3%-5% of the purchase price of the property you’ve chosen. Of this fee, £1,500 is a non-refundable option arrangement fee. The rest is held in a secure account and goes towards the deposit you need to buy the house at the end of the rental term. After that, you'll pay your monthly rent as usual, plus a little extra called a 'top-up'. The top-up is also credited towards your down payment when you buy the house.
Will prices change?
Nope! Your rent, top-up amount and the future purchase price are all locked in from the start, so you know what to expect. No surprises here!
Can I get my money back?
Unless very limited criteria are met, you will lose the accumulated commitment fee and top up if you change your mind and don't buy the house. If you are unsure of any of the rent-to-own terms, we are happy to answer any questions you may have. If you are still uncertain if rent-to-own is for you, we advise seeking independent financial advice before moving forward with your application.
Can I choose the house?
Yes, we will work with you to find your perfect home from available properties that are within your budget.
We don’t generally buy new builds (which, much like a new car, decrease in value the first few years). We also don’t buy mobile homes or houseboats.
Living in the house
What rental contract will I have during the rental period?
You will sign a standard Assured Shorthold Tenancy (AST) agreement for the rental period. The monthly rent will be fixed for the term, so you’ll be able to manage your budget knowing there won’t be any increases in rental payments. You’ll also have the peace of mind that, as long as you don’t break the terms of the AST, you have the right to stay in the property for the full five years.
Do I own the property?
During the five-year term of the tenancy agreement, you are a tenant and do not possess any ownership rights to the property. However, at the end of this period, you have the option – but not the obligation – to buy the property.
Am I allowed to make changes to the property?
We want you to feel at home, so feel free to paint the walls, change the carpet and put up your favourite pictures! If you want to remodel (new kitchen, bathroom, an extension), you will need to get written permission from us before you proceed. Renovation projects can present challenges and may not always proceed as expected, but we aim to accommodate your plans where possible.
Who is responsible for any repairs?
As it’s your home, we expect you to look after the property and keep it in a good state of repair, including day-to-day maintenance and repairs. Prior to buying any property, we will commission a full survey to identify issues that may arise during the rental period. If significant issues are discovered, we wouldn’t buy the property. Additionally, we will have buildings insurance which would cover any major issues that may arise.
Can I have a pet in the property?
Yes, pets are welcome!
Buying the house
Will I own the house?
Eventually, yes! After the agreed time, you'll have the option to buy the house at the price agreed upon when you signed up. The top-up payments you've made are credited towards the down payment on the house. We'll connect you with mortgage brokers to help you find the right mortgage for you.
How do I know you’ll sell the house to me?
When you move into the property you will sign an Option Agreement which gives you the legal right to buy the property, but not the obligation to, should your plans change.
How long will it take to buy the house?
Typically, it takes around five years, but this timeframe can vary depending on your needs and situation.
What if I don’t want to buy the house after the rental term ends?
The Option Agreement gives you the legal right to buy the property, but not the obligation to should your plans change.
What if my circumstances change?
What happens if I want to leave during the rental term?
This scheme is designed to help first-time buyers own their own home at the end of five years. This means you should expect to be in the property for the full rental term. However, we understand that sometimes people’s circumstances change. In this case, please contact us.
It is important to note that you must not breach the terms of the Assured Shorthold Tenancy agreement. If you do breach the terms, you will be evicted and lose the right to buy the property. You will also be liable for any rent remaining on the AST.
Can I buy the property before the rental term ends?
The earliest you can buy the property is six months before the end of the rental term.
How is Behomed different from shared ownership schemes?
When you buy a home through shared ownership, you buy a share which will be between 10% and 75% of the full market value of the property (this can be with a mortgage). You then pay rent to the landlord for the share they own. Usually, you also pay monthly ground rent and service charges for the maintenance of communal areas. The difficulty with this scheme is that, since the property value is always increasing, so will your rental payments on the part you don’t own. This means it can quickly become unaffordable for you to buy another share and ever own 100% of the property. With shared ownership, it can also be very difficult to sell, as there are few people who want to buy into the scheme. You are also limited to new-build homes or existing homes through a shared ownership resale scheme.
With Behomed’s rent-to-own scheme, you can choose from any house that’s for sale as long as it’s within your budget and meets our criteria. The rental payments are fixed, as is the price of the property at the end of the rental term. This means you can budget and you know exactly what you are working towards. At the end of the rental term, if you choose to exercise your option to buy the property, it will be 100% in your name.
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