It's not just social housing tenants who can access right to buy, first time buyers can too by taking out a lease option on a property of your choice.
Based on various US models, lease option, option to buy or rent to buy schemes could provide the perfect hybrid between renting and buying your first home.
Companies offering this service allow you to either choose your own property or choose one from a portfolio of theirs. You can rent the property from them – typically a new-build flat or house but sometimes a property of your choice, and have the opportunity of purchasing yourself within a three-year period.
Companies operating in this field will need to know how much you will be able to afford when you come to buy the property/exercise your option so it's worth contacting a mortgage broker before you discuss your property needs with them.
Some schemes allow you to rent in a property of your choice without having to pay for an option.
The main advantage is, rather than playing a game of ‘savings catch-up' whereby you can't save as fast as house prices rise, the price of the property will be fixed from the day you move in as a tenant. And, as the property will be yours one day, any time effort and money you put into its décor will not be wasted.
Of course this opportunity will cost you somewhere along the line. When you sign the tenancy agreement there may be an ‘option fee' of around two per cent of the current property value. However, this may be lower than the market value as they buy properties in bulk. This option fee if you pay it secures your undisputable ‘right to buy' within a set period, usually two or three years but it doesn't tie you into doing so. If you don't, it is possible to re-enter into the three-year agreement. Details may change depending on which scheme you are researching.
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