Rent to Buy

The Rent to Buy scheme is a discounted rent then buy scheme, offered to support our customers in getting onto the property ladder

How does the scheme work? 

Rent to Buy allows you to take advantage of a 20% rent reduction for five years. This discount is to enable you to save a deposit to buy your home outright after the five-year period. 

Alternatively, after the first year you can enter shared ownership, buying a share of your home between 10-75%. 

You can also enter shared ownership at any point within your tenancy. 

Purchasing an initial share of your home means you can continue to purchase further shares of your home through a process called Staircasing. 

More information on the Shared Ownership process can be found here.  

 

Please note 

All our homes are subject to yearly rental increases in line with Government policy and we will inform you of the increase before April of each year.  

The increase is capped by the Regulator of Social Housing, who set the Consumer Price Index (CPI) plus an additional percentage, these two amounts create the maximum figure that we can increase your rent by.

  

I haven’t purchased a share after five years – what happens now?  

If for any reason after the five-year period you are unable to purchase your home outright or through Shared Ownership, you will be able to discuss staying in your home with us on an intermediate rental agreement basis. This means your rent would increase based on the deposit discount period coming to an end.   

The aim of the scheme is to purchase your home, whether that is outright or through Shared Ownership. If you have not done so after 10 years, Karbon have the right to and may choose to end your tenancy.  

The 5 key eligibility requirements for this scheme are:

  • The property must be your only home, both in the UK and abroad, currently or previously 

  • At least one member of your household needs to be in permanent employment 

  • The joint household income must not exceed £80,000 per annum 

  • The rent should utilise no more than 45% of your household income 

  • If personal savings exceed 10% of the homes value your application may not be eligible, dependent on personal circumstances 

  • If you’re an existing homeowner, you may be eligible, for example, if due to a relationship breakdown 

Rent to buy timeline

1

2024

Sign up to initial rental agreement with 20% discount on market rent for five years  

2

2025

After living in the home for a year, whilst saving the 20% rent reduction, you would be offered the opportunity to enter shared ownership.  

3

2029

If you chose not to enter shared ownership, you will have the opportunity to buy your home through traditional outright purchase. You still have the option to enter shared ownership after the five-year period has ended. 

4

2034

If after 10 years you still haven't purchased your home through Shared Ownership or outright purchase, Karbon have the right to and may choose to end your tenancy. 

The process is outlined below:

  • Visit our New Homes webpage to identify a development/house type you are interested in 
  • On identifying your preferred development, advise the Sales and Marketing team by emailing salesandmarketing@karbonhomes.co.uk who will then forward a Rent to Buy application  
  • Upon completion, your application form will be forwarded to a Financial Advisor who will contact you. You’ll need to provide the documentation they require within 2 weeks 
  • Once you’re financially approved, you can reserve your new home, no deposit required! 

Things to consider

If you make an application which is assessed and declined, a further application with amends i.e. an additional applicant, cannot be submitted or accepted. Due to the scheme being extremely popular, it is our role to ensure that the intention of applying for this scheme is genuine, proven and to result in home ownership. 

 

Non-disclosure of any information, CCJ’s, IVA’s, debt or adverse credit will result in your application being closed immediately and you will not be permitted to re-apply for the rent to buy scheme indefinitely. 

 

If you are currently in an IVA/DMP, you will need to have 12 months or less on your remaining term in order to be considered for Rent to Buy. The current stance from the lenders is that if you are currently in an IVA/DMP, you will not be accepted for a mortgage. If you are looking to move to Shared Ownership after 12 months or to purchase in full after five years, the remaining term of the agreement becomes crucial. If you have defaults on your accounts, they will need to be settled in full. If there are numerous defaults over a number of years, you may not qualify due to spending habits. 

 

If you are an existing Rent to Buy customer or have previously had a Rent to Buy home with Karbon Homes, you will not be given priority over those who have not yet had the opportunity to benefit from the scheme. 

Next steps 

 

To receive a Rent to Buy application form, please contact our Sales and Marketing team at salesandmarketing@karbonhomes.co.uk 

For more information call us on 0191 223 8749 

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