With a typical entry-level property in London costing around £250,000, this would mean having to find £32,500 – in addition to stamp duty, legal fees and removal costs.

Compare this to the average London property – now more than £350,000 – the deposit would be £45,500, plus £10,500 in stamp duty. No wonder 100% mortgages have existed for so long!

If you thought finding the deposit was difficult, then you have to contend with having a financial track record: Credit reference, credit history and absolutely no late payments on anything.

Having jumped through the multitude of hoops you’ll then get that all important decision in principle. Talk about headaches it’s enough to make you reach for the Anadin Extra.

The Property Step can ease those headaches with a no nonsense Rent to Own scheme. It’s a win/win property solution that helps first time buyers get on the property ladder safely. To see how this works, take a look at Mr & Mrs Rhodes, a fictional young couple starting out.

Mr Rhodes works as a builder and Mrs Rhodes as a telesales executive, together they earn above the UK average and can afford an 80 – 85% mortgage.

However all the major lenders will not approve their mortgage, as neither have owned a property in the UK,  do not have a recent credit history and cannot afford the exorbitant deposit. With the influx of overseas workers in the UK this is a known hurdle.

In some cases it can take up to two years to obtain a credit history to satisfy the main mortgage lenders and even longer to find the deposit. In the meantime property prices have risen making it even more difficult to save for that ever increasing deposit.

Typical Scenario : Mr & Mrs Rhodes

Mr & Mrs Rhodes have some savings towards their deposit but not the 13% plus costs. They can afford to pay a 85 -90% mortgage but are caught in the first time buyers, mortgage trap without a recent credit history and large deposit. With property prices fluctuating over the years they are no closer to buying their first home.

Property Solution: Rent to Own

The Property Step offers Rent to Own properties. To secure your new home the purchaser/tenant must agree to:

• A fixed purchase price, with an option to buy in 2 years or less.
• Pay a one off (non refundable) deposit, deductible from the fixed purchase price.
• Where applicable overpay rent during the 2 year period acting as credits deductible from the fixed purchase price.
• Pay rent on or before the due date (typically 1st of the month), to qualify for the deduction on  the fixed purchase price.
• Repair and maintain the property as needed during the duration of the rental period.
• Exercise your right to buy at the fixed purchase price or vacate the premises at the end of the 2 year period.

Rent to Own Benefits are numerous:

• An agreed fixed purchase price, set in stone with no fluctuations, no gazumping, no nonsense.
• Pay an affordable rent that reduces the final purchase payment, aiding the deposit required by major lenders.
• Obtain a certain credit history that satisfies all mortgage lenders. Note: By proving your able to rent and pay on schedule and on time, gives major lenders confidence that you are a good reliable payer.
• Live in your house from day 1, so there is no need to move to another area.
• No trawling of the many property websites and pounding the streets viewing unsuitable properties.
• Your safe in the knowledge that you’ve already found your home and build for the future.
• Gain equity in your home before you own the property. As property prices adjust you will directly benefit from fixing your purchase price today.

To join our waiting list of customers for Rent to Own properties please click ‘Rent to Own Required‘ to  register your interest. We will contact you as soon as we have a property available.

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