Bespoke Property Wealth is a firm run by several property investors and entrepreneurs. Each person running the business has vast experience in property investments and started their multimillion portf.......

RENT TO OWN BASICS & UK MARKET OVERVIEW BY BESPOKE PROPERTY WEALTH LTD

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Agenda:

• Understand the difference between Rent-to-Own and buying or renting the property
• Understand who the tenant-buyer is
• Understand the potential of the market in the UK

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Rent-to-own is a unique way to purchase the property. It is a combined renting with a purchase.

The process is relatively simple. You pay a small deposit today, and you are renting the property for an agreed period. Afterwards, you simply purchase the property with the help of a mortgage for the fixed price from the outset.

The deposit you are paying is far less than a standard deposit required by banks and is usually 5-10% of the property purchase price. However, it can go up subject to your circumstances and landlord requirements. However, the higher deposit will automatically mean a lower rent, so you might be just better off paying more deposit. 

The monthly rent you are paying is standard market rent for similar properties in the area, plus on top, you are paying around 20% of your monthly rent, which goes towards your deposit for a purchase. 

For example, your monthly payment is £1200, and £1000 from it is the rent, and £200 is your capital repayment going towards a deposit for the purchase. However, you are free to make any overpayment that will go towards your deposit. 

The landlord potentially can look at the lower monthly payments if the deposit is high enough, so there is a way to save even more!

The term can differ from one property to the other but usually is between 2-5 years. It is the time during which you are paying your rent together with capital towards the deposit. You are likely to make sure your credit history is getting better through that time, as you should prepare yourself for obtaining a mortgage once the term is over. 

The purchase itself is a standard UK Conveyancing process. You will also likely apply for a mortgage which should be at least six months before the end of term. We are working closely with experienced regulated mortgage advisors dealing with Rent-to-own cases daily who guide you through the whole process of mortgage application until purchase completion. Your purchase price is agreed upon at the beginning of the Rent-to-own agreement. Your deposit for the entire purchase is the amount you paid at the very beginning, plus your monthly capital payments together with any extra overpayment you have done throughout the agreement.

Once you sign a Rent-to-own agreement and move to the property, then you are a tenant-buyer. 

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Potential of UK rent to own market. 

Every year over 25% of mortgages are declined for various reasons, most common is not sufficient deposit or income. 

Aspirational future homeowners are left without options to own property in the UK.

Apart from it yearly over 300,000.00 new immigrants are moving to the UK. For the first years since they are new in the country, chances to be approved by mortgage companies are very slim. 

Many new arrivals are professionals with savings and the desire to own family property in the UK. 

Taking into consideration the number of declined mortgages, immigration to the UK and other factors related to the property market such as the COVID pandemic, there are a large group of people who wish to become Homeowners but they can't. 

From Bespoke Property research we estimate the number of people to be over 4 million. 

On the UK property market, there is a very little number of property companies offering Rent to Own solutions for aspirational future homeowners. 

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Conclusions:

Rent-to-own is a unique way to combine renting and owning 

To own the property in Rent-to-own you first pay the deposit, then monthly rent with capital uplift, and you are getting the mortgage at the end of the term, and then you fully own the property. 

Between signing the agreement and completion, the person staying at the property is called tenant-buyer.- Future Homeowners. 

The potential of rent to own model in the UK is huge, Bespoke Property Wealth has over 10,000 tenants who are qualified and waiting for properties across the UK. 

For this reasons, we join to Crowdfunding Place platform as rent to own operator and offer investors a unique opportunity to make fixed profits, fully secure and help tenant-buyers across the UK

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