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As a young professional, it can be incredibly taxing to be juggling so many different priorities; adding the idea of homeownership in the modern world into that mix can be particularly unsettling. But there is hope! Bridging the gap between eternal private renting and complete home ownership is the Rent to Buy scheme, which helps young professionals and first-time buyers to save while still living independently. So, why does Rent to Buy work so well for young professionals?
Rent to Buy works so well for young professionals because:
Keep reading to find out more about how Rent to Buy schemes work and what a young professional can do to maximise their fulfilment from a Rent to Buy home.
Rent to Buy is a scheme that allows tenants to rent a property at (typically) 80% of its market value. This does not mean tenants pay less per month, however. The aim is that the remaining 20% of the would-be rent goes into a savings account that is exclusively intended for future home deposits.
The intention of Rent To Buy is to help first-time buyers get onto the property ladder by creating a better opportunity for saving. It is great for helping prospective buyers to feel like their money is going towards something positive while renting.
In most ways, Rent to Buy schemes work just like private renting, and act as a stepping stone from private renting to Shared Ownership schemes (or buying a home traditionally if you can afford it).
The criteria for Rent to Buy include:
Most young professionals will be able to fulfil these criteria with ease, making Rent to Buy a great route for getting onto the property ladder early.
While the two schemes have similarities, they serve different purposes:
Rent to Buy is a popular choice among young professionals and graduates who are looking to develop their financial independence. There are multiple reasons Rent to Buy suits young professionals, including:
There are a handful of key considerations for the young professional who is considering a Rent to Buy home, including:
It should be obvious, but: you have to live here, so make sure you like the location! One of the greatest joys of living independently is getting to know the area, or getting to live close to somewhere you already love. Make sure that you do a sweep of the local area to make sure that it truly resonates with you, and to check that everything you need is accessible.
As a young professional, it may be tempting to just live somewhere close to your work, though it can be a double-edged sword. Make sure that your new home doesn’t just meet your practical requirements (like being close to work) but also provides an additional level of fulfilment (like being close to parks, social areas, and clubs).
The eligibility requirements for Rent to Buy can be very accessible to young professionals, though it is still worth conducting a more in-depth check to ensure that your plan is completely possible.
After you have ascertained that you are eligible for Rent to Buy as a young professional, you can look for homes that are offering the scheme. Plumlife offers a suite of new build homes across Manchester and its surrounding areas through the Rent to Buy scheme to help aspiring young professionals get onto the property ladder.
Review your own finances before committing to property hunting and set a budget, and don’t overextend. There is no point moving into a home that is slightly over your budget if the plan is to save money. Find the balance between affordability and comfort, and browse from there.
Before or after you have found a property you like, review whether the home will suit your lifestyle. Here are some features of a new home you may need to consider depending on your lifestyle:
Rent to Buy makes moving out of the rental cycle easier by allowing young professionals to save money for future homes while still having their own place to live.
The pressure to move back home in order to save money can loom large over tenants living month-to-month. By using a chunk of the cost of rent to save, tenants are given breathing space to think about homeownership as a reality without straining the rest of their finances.
The scheme also incentivises landlords and tenants to stick with one property over a longer period, with less expectation of needing to move or break into the savings to deal with rent increases. Rent to Buy tenancy agreements typically run for up to 2 years, though your landlord may agree to a tenancy extension or offer a longer contract from the start.
For young professionals working their way up the career ladder, the need to move locations or change jobs can come around quickly. Rent to Buy is as flexible as private renting in this regard.
Your tenancy agreement will outline exactly how long you are expected to stay at the property — for example, up to two years — at the end of which you would either move out (and take those savings with you) or buy the property in some form. To this end, a young professional’s options are incredibly open even while on a Rent to Buy scheme.
Familiarise yourself with the costs associated with leaving your contract early before signing for any property if you think that you may need to move out earlier than expected.
Savings are a core component of financial independence and security. It can be hard for young professionals to build up those finances on their own while working and living away from home, though.
Rent to Buy supports long-term financial independence by providing a perfect channel for young professionals to build their own savings from scratch without having to rely on others. Once a tenancy is over, too, if you don’t choose to buy the property, young professionals can take those savings through into the next steps of life, which can be particularly lucrative if moving into another Rent to Buy home or a Shared Ownership scheme.
Rent to Buy offers flexibility for those who need more time to build credit and savings or improve their overall financial situation before buying a home without adding pressure.
Plumlife has a phenomenal selection of new build Rent to Buy homes for young professionals across Manchester to browse. From the aspiring workaholic to the new starter, if you are looking for stability and opportunities for long-term financial growth, Rent to Buy is the scheme for you! Contact our team to understand your eligibility today.
Take a look at more blogs about Rent-to-Buy below:
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