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Rent to Buy scheme

  • 28-04-2015 2:50pm
    #1
    GenGenie
    Registered Users, Registered Users 2 Posts: 37 ✭


    Hi,

    Does this scheme still exist? Is it an agreement you must make with a particular house seller or bank.

    I saw somewhere on net that NAMA sell houses this way - is this true?

    Thanks


Comments

  • #2
    Michael D Not Higgins
    Registered Users, Registered Users 2 Posts: 7,223 ✭✭✭Michael D Not Higgins


    There have been cases here where this scheme has run its course and the bank wouldn't entertain the rent paid as the deposit or the builder went into receivership and the money already paid was lost. If it is still going make sure you get everyone on the same page as you don't want to be in the same situation as the above when it comes down to it in a couple of years.

    My own advice would be to avoid this kind of scheme.


  • #3
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,286 Mod ✭✭✭✭The_Conductor


    If you google 'rent to buy' in this forum- you will see people's experiences particularly in the 2005-6-7 period.

    Rent-to-buy was a way for builders to sell properties that people were not in a position to save deposits for. Often the price was set in advance- or subject to upward only review (a bit like commercial rents).

    Michael D's few lines are accurate. There were serious problems with it in the past- not least the simple fact that many banks refused to accept the rent paid to be a 'deposit' (and indeed- the very valuations put on the properties was also often a massive bone of contention with lenders).

    If you have no option to buy at the moment- I would suggest either renting somewhere nice and not saving a deposit- or going for spending as little as possible, accept you are going to be scrimping and saving for a few years- and get your deposit together the good old fashioned way.

    When I was buying my home- I lived in a bedsit for a number of years- working my ass off in a deadend call centre job- while I saved up my deposit (which was 10% at the time). It was tough- but I knew that my sacrifices would have something at the end of the tunnel. Now that prices are stabilising- particularly in the Dublin area- its possible to do this again. Your savings are not going to be eroded- as they would have been during the boom.

    Personally- I view rent-to-buy schemes- like the sort of tourist offers you get made on the beaches in Spain- simply too good to be true- and more often than not- with strings that only suit the vendor. Unfortunately, Ireland's history with rent-to-buy property has been just like this.


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