The tightening of credit in this harsh economic climate has made it increasingly difficult for many to get onto the first rung of the oft-mentioned property ladder.
With their own income streams running thinner of late, estate agents have had to examine new ways of generating business – and that’s where the ‘rent to buy’ scheme comes in.
“While first time buyers may have the disposable income to afford mortgage repayments they may have difficulty getting on the property ladder as they can’t accumulate the necessary deposit,” said well-known city auctioneer John Rohan.
He added: “With the ‘rent to buy’ scheme intending purchasers will be able to move into the home of their dreams immediately and after a specified period be able to buy it at a pre-agreed price.
“There is no need for a large deposit and they will be able to live in their dream home before committing to buying it, secure in the knowledge that the price agreed won’t change.”
So how does all this work? John Rohan provided The Munster Express with the ‘science bit’.
“The buyer pays rent for a set period and then exercises their option to purchase at a pre-agreed price,” he explained. “The time period is normally six months to three years.”
Rohan continued: “Rent has traditionally been seen as dead money and this scheme allows you to put that money towards saving a deposit for your future house.
“With this scheme you build up credit in the home you want to buy which proves to your bank that you are capable of saving.”
While it has undoubtedly become tougher to qualify for a mortgage, the ‘rent to buy’ approach provides an enhanced opportunity of achieving that qualifying goal, he said.
“We want to encourage nervous house buyers to come off the fence and try before they buy,” he stated. “There is no catch and commitment other than a standard rental agreement.”
Incidentally, Sherry FitzGerald John Rohan is currently running a commercial ‘rent to buy’ scheme for six industrial units at Waterford Airport Business Park. For further details, call 051-843880 or log onto www.sherryfitz.ie
