What is Rent to Buy?
Rent to Buy is a government-backed affordable housing scheme that allows eligible households to rent a new home at 80% of market rent for up to 5 years, with the opportunity to purchase the property at the end of this period. The scheme is designed to help working households who cannot afford to buy immediately but aspire to homeownership.
2025 Key Benefits
20% discount on market rent | 5-year rental period | Option to purchase | New build properties | Priority for working households | Build up savings for deposit
How Rent to Buy Works
80% Market Rent
Pay only 80% of market rent, giving you savings to build towards a deposit.
5-Year Period
Rent the property for up to 5 years before deciding whether to purchase.
New Build Homes
All properties are newly built to modern standards and energy efficiency.
Purchase Option
Right to buy the property at market value after the rental period.
The Process Overview
Rent to Buy Example
Market rent: £1,200/month
Rent to Buy rent: £960/month (80%)
Monthly savings: £240
5-year savings potential: £14,400
Property value after 5 years: Current market value
Eligibility Requirements
Who Can Apply?
Household Income
Annual household income between £16,000 and £80,000 (£90,000 in London).
Employment Status
At least one person in the household must be in employment or self-employment.
Local Connection
Must have a local connection to the area where you're applying.
Housing Need
Cannot currently own a home and must demonstrate housing need.
Income Requirements
| Area | Minimum Income | Maximum Income |
|---|---|---|
| London | £16,000 | £90,000 |
| Rest of England | £16,000 | £80,000 |
| Regional Variations | Local authority discretion | May be lower in some areas |
Local Connection Criteria
- Employment: Working in the local area for a specified period
- Residence: Living in the area for a minimum period (typically 2-3 years)
- Family ties: Close family members living in the area
- Support networks: Caring responsibilities or receiving care locally
- Education: Children attending local schools or yourself studying locally
Application Process
Step-by-Step Application
Rent to Buy Application
Find Available Properties
Search for Rent to Buy properties through local authority or housing association websites.
Submit Application
Complete eligibility application form with all required supporting documentation.
Assessment Process
Housing provider assesses eligibility against income, local connection, and housing need criteria.
Shortlisting
If eligible, you'll be placed on a waiting list and invited to view suitable properties.
Property Allocation
When matched with a suitable property, you'll be offered a rental agreement.
Required Documentation
Identity & Residence
Passport/ID, proof of address, council tax bills, utility bills for local connection.
Employment Evidence
Employment contracts, payslips (3 months), employer references, self-employment accounts.
Financial Information
Bank statements, income proof, existing debts or commitments, savings details.
Housing Circumstances
Current accommodation details, reasons for needing to move, household composition.
Calculate Your Rent to Buy Savings
Work out how much you could save over 5 years and your potential deposit for purchase.
Affordability CalculatorThe Purchase Process
Transition to Ownership
Purchase Timeline
You can typically purchase the property any time after the first year of tenancy, but most people wait until the end of the 5-year period to maximize savings and benefit from any property value increases.
Purchase Options
Path to Purchase
Express Purchase Interest
Notify your housing provider of your intention to purchase, typically 6 months before desired completion.
Property Valuation
Independent valuation determines current market value of the property.
Secure Mortgage
Obtain mortgage approval based on the property's current value and your financial situation.
Complete Purchase
Exchange contracts and complete the purchase at the agreed market value.
Valuation and Pricing
Purchase Price Determination
Valuation basis: Current market value (not original price)
Valuation method: Independent RICS surveyor assessment
Price protection: None - you pay full market value
Capital growth: Full benefit of any property value increase
Costs and Financial Planning
During Rental Period
Monthly Rent
80% of market rent, typically £200-400 less than market rate depending on property value.
Utilities & Council Tax
Tenant responsible for all utilities, council tax, and communication services.
Contents Insurance
Tenant must arrange contents insurance; building insurance covered by landlord.
Maintenance
Landlord responsible for major repairs; tenant covers minor maintenance and decoration.
Purchase Costs
| Cost Type | Typical Amount | Who Pays |
|---|---|---|
| Property valuation | £300-600 | Buyer |
| Mortgage arrangement | £500-2,000 | Buyer |
| Legal fees | £800-1,500 | Buyer |
| Survey costs | £400-800 | Buyer |
| Stamp duty | Varies by value | Buyer |
Savings Strategy
Building Your Deposit
The 20% rent discount provides an excellent opportunity to save for a deposit. Many Rent to Buy tenants save the full discount amount each month, building substantial deposits over the 5-year period.
What Happens If You Don't Buy?
Alternative Options
End of Rental Period
If you choose not to purchase at the end of 5 years, you must vacate the property. There's no automatic right to continue renting, though some providers may offer limited extensions in exceptional circumstances.
Exit Strategies
Purchase Alternative Property
Use savings to buy elsewhere, possibly through Help to Buy or other schemes.
Apply for Social Housing
Re-apply for social housing if circumstances warrant and you meet eligibility criteria.
Private Rental Market
Move to private rental using savings accumulated during Rent to Buy period.
Another Rent to Buy Property
Apply for another Rent to Buy property if available and you remain eligible.
Comparison with Other Schemes
Rent to Buy vs Other Options
| Scheme | Initial Cost | Ownership Timeline | Flexibility |
|---|---|---|---|
| Rent to Buy | 20% rent discount | Up to 5 years rental | Choice to buy or leave |
| Shared Ownership | 5-10% deposit + 25-75% share | Immediate partial ownership | Can staircase to full ownership |
| Help to Buy | 5% deposit + 20% equity loan | Immediate full ownership | Must repay equity loan |
| Social Rent | Lower rent ongoing | No ownership option | Secure tenancy rights |
Advantages of Rent to Buy
- Time to save: 5-year period allows substantial deposit accumulation
- Test the property: Live in the home before committing to purchase
- No immediate commitment: Flexibility to decide whether to buy
- New build benefits: Modern, energy-efficient homes with warranties
- Stable housing: Secure tenancy for up to 5 years
Potential Disadvantages
- No guaranteed purchase: Property value may increase beyond affordability
- Limited time: Must be ready to buy within 5 years or leave
- No ownership rights: Cannot modify property during rental period
- Income requirements: May exclude lowest-income households
- Limited availability: Not available in all areas
Regional Availability and Variations
Where to Find Rent to Buy
Provider Types
Rent to Buy properties are provided by housing associations, some local authorities, and private developers as part of planning obligations. Availability varies significantly by region and local housing policies.
Finding Available Properties
Local Authority Websites
Check your council's housing pages for Rent to Buy schemes and partner providers.
Housing Association Partners
Contact local housing associations who often manage Rent to Buy properties.
Help to Buy Agent
Regional Help to Buy agents can provide information on all government schemes.
New Development Websites
Some developers advertise Rent to Buy properties on their development websites.
Professional Advice and Support
When to Seek Help
Housing Advice
Understanding eligibility, application process, and comparing housing options.
Financial Planning
Mortgage advice, savings strategies, and purchase readiness assessment.
Legal Guidance
Understanding tenancy terms, purchase conditions, and your rights.
Property Surveying
Independent assessment before purchase and understanding property condition.
Free Support Available
Many housing providers offer free guidance throughout the Rent to Buy process. Citizens Advice, Shelter, and local housing advice services provide free, independent support for understanding your options and rights.
Making Your Decision
Is Rent to Buy Right for You?
Decision Framework
Career Stability
Consider whether your income is likely to remain stable or grow over 5 years.
Location Commitment
Ensure you're happy to remain in the area for at least 5 years.
Savings Discipline
Assess your ability to save the rent discount for deposit accumulation.
Property Suitability
Consider whether the property meets your long-term needs.
Key Considerations
Rent to Buy works best for households with stable incomes who want to test homeownership while building savings. It's particularly suitable if you're not quite ready to buy immediately but have clear homeownership aspirations and the discipline to save consistently.