<Guides
  • >
  • Guides>
  • How does the Rent to Buy scheme work?

How does the Rent to Buy scheme work?

Dan Base photo

Written by Dan Base, Financial Content Writer

27 December 2018

If you want to buy a house but can't afford a deposit, there are several schemes that could help you own your own home. So what does Rent to Buy mean, and how can it help you?

Young couple lying among packing boxes

What is it?

Rent to Buy is a government scheme that was set up to help you own your first home, even if you can't afford a deposit at the moment.

It was introduced to provide cheap loans to help housing associations and social landlords build 10,000 new homes - mostly one or two bedroom flats - for young buyers.

The government planned to provide £400 million between January 2015 and 31 March 2017 (£200 million for London, a further £200 million for the rest of England).

These new properties were made available for first time buyers to rent at 80% of the market value for at least seven years; then the occupier gets first refusal on buying it.

While paying 20% less in rent, you may be able to build up a deposit to buy the property or another one after the seven years is up. But there is no obligation to buy the property if you decide not to.

Is the scheme still open?

Rent to Buy properties are not available everywhere in the UK, but you can use it and similar schemes in some regions.

Find your local Help to Buy agent here to see if they offer Rent to Buy homes in your area.

Other ways to buy your first house

There are several schemes and specialist mortgages to help you buy your first home.

If you are struggling to save a deposit, here is how to get a mortgage with no deposit and get on the property ladder.

How does the Rent to Buy scheme work for tenants?

Monthly rent for Rent to Buy properties, including service charges, was capped at 80% of the average market price for the area. This was to allow tenants to save for a deposit to buy the property or another one.

Eligibility for the Rent to Buy scheme

The scheme was available for households with an income below £80,000. It is available for first time buyers or people who previously owned a home but are unable to afford to buy one now.

If you're a first time buyer or looking to move house or remortgage, we can help you find the best mortgage deal to suit your needs.

Compare mortgages

You may also like

  • Moving house: change of address checklist
  • How to save enough money to move out
  • How should you pay your rental deposit?
  • How can I help my children buy their first house?
  • What are the pros and cons of the Help to Buy scheme?