How does part buy-part rent work?

If buying outright isn’t an option for you, part buy-part rent offers an alternative route to get you onto the property ladder.

Part buy-part rent is when you buy a share of a house up to 75% shares. Starting shares vary across developments and plots with shares available depending on affordability. You would then pay 2.75% rent on the remaining share you did not purchase and this is paid monthly via direct debit. You can purchase more shares in the future until you own the whole property and stop paying rent altogether. You can buy more shares or sell at any time.

When purchasing a part buy-part rent property, you will only need to pay Stamp Duty Land Tax (SDLT) on the price of your share. There is no SDLT due for First Time Buyers buying a part buy-part rent property valued up to £500,000. Your financial advisor or solicitor will be able to give you more information about the fees you need to pay. 

So how does part buy-part rent compare against renting or buying?

The examples below are based on a £230,000 home.

Part buy-part rent based on a 50% share. All figures based on a £230,000 home. Estimated monthly cost is an illustrated figure only, please speak to an Independent Financial Advisor for exact costings. Additional costs such as building insurance, monthly management fee and estate charge are not included in the monthly rent figure or in the estimated monthly cost. Rent is charged at 2.75% of the unsold share value. This increases annually with RPI + 0.5%. Starting shares vary across sites and plots. For more information visit your local Home Reach development. **Assuming rental yield 4.5% per annum.

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