Home Solutions

How it works

Step 1:

Just call us or fill in our tenant / buyer application form. We will then contact you to find out how we can help you buy your first home.

Step 2:

When we have located a property which we think suits your requirements we will get back in touch so that you can view the property. We will also require some referencing details which we will follow up to protect ourselves from unscrupulous tenants / prospective buyers.

Step 3:

Once you have decided that you would like to rent now and buy the property later we will discuss terms. We will give you an Assured Short Term Tenancy agreement (as any other landlord would) and a lease document which gives you an option to buy the property in the future. It will state how far into the future you wish to buy the propert (usually 2-5 years time), and you decide the timescale. The lease document is legally binding, and ensures we cannot sell the property to anyone but yourselves, and we cannot increase the price you wish to buy it for.

Step 4:

Give you the keys and you move into the house and make it your own home.

What is the Rent now, Buy later Programme?

The Rent now, Buy later Programme contains a lease option which is a legal contract that entitles a person who has rented or leased a property to buy it at a future date.

As part of the lease option we would discuss:

1	How far into the future you would like to buy the property (usually 2 – 5 years)

2	Sale price and set this now for the date in the future you wish to purchase at. The sale price is usually around the price you would pay for the property today, so it means you would be able to profit from any increase in the value of the house between today and the purchase date.

3	The amount of lease option upfront payment (not a deposit) to be paid. This would be returned when you bought the property, and could be used to help with a deposit towards a mortgage. However, if you decided not to purchase the property which you are legally entitled to do so, this upfront payment would be lost as this payment shows us you are intending to buy your home.

4	Decoration and maintenance of the property. This is done by yourselves as this is now your home and any value you add to the property you get to keep.

All the above would be set out within the lease option agreement which is legally binding on both parts.

We would also discuss, if necessary, whether you would like us to help you repair your credit to ensure that you can get a mortgage when you buy the property from us.

Example: Rent now, Buy later Programme

The example given above below is for illustration purposes only, and other circumstances such as no money saved for a deposit would not necessarily mean that you would be excluded from the Programme. This example is just one of a variety of solutions that can be offered.

A couple who are currently renting but would really like to buy their first house contact Home Solutions and complete our tenant / buyer application form. They have saved £3,000 towards a deposit but all the houses they like cost £100,000 and they would need at least a 10% deposit which means saving £10,000 and a bit more for legal costs and estate agent fees.

Under this Programme they would need to pay an upfront option payment of approximately 3% of the value of the house they wish to rent and ultimately buy. Therefore the £3000 saved would cover this payment. All legal fees are paid by Home Solutions, so no costs to you whatsoever, and the £3000 would be returned upon sale of the property. The rent is set at £650 per month which would be detailed in the Assured Short Term Tenancy agreement.

The lease document would list the price to be paid for the property. After discussing with the couple Home Solutions discovers that some credit repair is needed and together they estimate that purchase of the property in 4 years time would enable them to repair their credit so they could then obtain a mortgage.

The sale price is agreed at approximately £100,000 (today's value of the property) which will be paid in 4 years time. The couple gain any appreciation in value on the property. In today's economic climate prices are falling but historically prices on average double every 7 years. If there was 5% growth per year the following would happen:

Today:	£100,000
Year 1	£105,000
Year 2	£110,250
Year 3	£115,763
Year 4	£121,551

The couple would then apply for a mortgage for £100,000 (sale price) but would then own a house worth £121,551. They would need a deposit of £10000 for a 90% mortgage. £3000 would be returned from Home Solutions and the couple would need to have saved a further £7,000 during the 4 years. There may also be the possibility of a part gifted deposit from Home Solutions for any shortfall in the deposit required to make the purchase.

This Programme gives people the chance to own their own home now whilst they continue to save towards a deposit and repair any credit if needed. They then have the chance to purchase a house at below market value sometime in the agreed future.

Savings to the couple under the Rent Now, Buy Later scheme:

Legal costs	£600
Survey	£350
No rental deposit	£650
Equity	£121,551 (assuming 5% growth)
TOTAL savings	£123,151

We provide solutions to property problems. We are ethical, flexible and innovative in our approach. We specialise and work exclusively in the North East, and guarantee our service will be tailored to your unique and personal circumstances.