Rent to Buy: What it is and How it Works?
With average house prices of nearly £300k across the country, it's hard to get on the housing ladder for first time buyers.
Unless you're lucky enough to live in one of the most affordable parts of England, your choices are limited and often mean renting for an indefinite period until you manage to save enough for a deposit or your circumstances change significantly.
To help homebuyers, the Government has created different schemes, including Rent to Buy.
Rent-to-Buy, as the name suggests, allows you to rent a home and then buy it at a discount to the local market property price.
Here’s more about what rent to buy is and how it works.
Article updated: September 2025
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by Robert Jones, Founder of Property Investments UK
With two decades in UK property, Rob has been investing in buy-to-let since 2005, and uses property data to develop tools for property market analysis.
What is Rent to Buy?
As above, Rent to Buy is one of a number of homeownership schemes that is still recommended by Government to help people interested in getting on the housing ladder but who are currently priced out of their local market.
If you are looking to buy a home but can't afford your local house prices, maybe the housing market cycle is currently at a peak, Rent to Buy, is designed to enable people to rent a home for a period before buying it, save for a deposit in the meantime and then when they purchase, buy it at a discount.
In reality this is mainly used in southern regions and some major cities like Manchester or Birmingham, as most secondary smaller cities and towns are still 'affordable' and local incomes can often afford to buy a home without the need to do shared ownership or rent to buy.
Rent to Buy recognises the fact that some people who rent want to buy a home and can afford to buy. But because they are paying rent every month they find it hard to save for a deposit.
Rent to Buy allows buyers to rent a property for up to five years at a discounted rent. At the end of the rental period, you can then buy the property. The idea is that the money you have saved in rent over the renting period can be put towards a deposit to then buy the property.
Rent to Buy comes under several different brand names. These include rent-to-own, rent to save, rent-save-buy, intermediate rent, try before you buy or in London, London Living Rent.
- In Wales, Rent to Buy is known as Rent to Own – Wales and works in a slightly different way.
- In Northern Ireland, Rent to Buy is known as Rent to Own and again is different to other parts of the country.
- Here is more information about the different schemes which operate in Scotland.
The Advantages and Pros of Rent to Buy
The main advantage of Rent to Buy is that it allows renters to become owners and save for the deposit while they’re renting. It gives tenants certainty that they can buy the house they are renting and stay living there, helping them settle and make a home.
Rent to Buy means that the money you pay in rent isn’t entirely dead money. It is contributing indirectly towards the purchase of a house you will eventually own, which gives tenants more certainty and a chance to buy the property at a discount to local market prices.
The Disadvantages and Cons of Rent to Buy
Rent to Buy is a long-term commitment. If your plans or circumstances change during the Rent to Buy period, you may be unable to buy the property.
So if you are not looking to stay in the home long term, are unsure about your current career or plans to stay living in the area, then rent to buy might be to restrictive.
Its not available on every property, only a select few, and the rent payable maybe more than if you were to find another local property, that had no option to buy, but was smaller, in a lower value area or was available from a private landlord at a lower rent.
Rent to Buy might not necessarily be the best or cheapest way into homeownership, depending on your personal circumstances and your long term homeownership plan.
Remember rent to Buy isn’t available on every property nor in every area.
If you buy a property as a rent-to-buy it may not always be easy to sell it if you want or need to compared to another local property.
Remember, property prices are a function of supply and demand, if the supply of rent to buy properties is limited to a handful of new builds in a new estate, then maybe the price paid is not quiet value for money and if you try and sell quickly after buying, is there a ready market of other local buyers willing to pay the right price?
You should consider rent-to-buy if you intend to live in the area and the property over the long term.
How Rent to Buy Works
Rent to buy schemes can vary but with rent to buy you typically rent a home for up to five years. There is usually a discount on equivalent local market rents of 20% during that period or sometimes the difference is provided by a home equity loan from the Government, although this is subject to change and there isn't always funds available for every country.
After a minimum period (at least six months or a year, usually) you have the option to buy the house. You may be able to buy it outright; however, some shared ownership schemes, where you buy a share and rent the rest for another period of time, are also usual.
After a maximum of five years, you may have to buy the house or move out. It is not always possible to extend the rental period beyond five years and the rent paid will be lost, as in, its not a refundable deposit.
An Example
A Rent to Buy property has a purchase price of £250,000 and a monthly rent of £1,200, which is 80% of the local market rent of £1,500.
You rent the house for 5 years, paying £1,200 PCM and saving the £300 rental discount in a savings account. After 5 years, you have saved £18,000. You use this as a deposit and take a mortgage (or raise property finance) to pay for the rest of the property purchase price.
Who is Eligible for Rent to Buy?
Rent to Buy schemes come with some conditions which can vary from scheme to scheme.
It’s important to bear in mind that Rent to Buy schemes aren’t really aimed at those who can’t afford to buy a property. They are aimed at those who can afford to buy but can’t get the deposit together because they are renting. If you can’t afford the mortgage once you buy the property Rent to Buy isn’t for you.
Requirements include
- You must be a first time buyer
- In full or part time employment
- Able to pay your rent and save for a deposit at the same time
There may be other conditions, depending on the scheme. For example, you may need to be a housing association tenant, employed in key services like the NHS, Police, Fire or Military, or have a local connection.
Rent to Buy is intended for those who intend to live in the property as their main home.
Where Rent to Buy is Available
Rent to Buy isn’t available in every area or for every type of property. You can only rent to buy if a suitable scheme is available in the area in which you want to live.
These properties aren't available by every landlord. In order to encourage more of these properties, local councils often require new build developers to allocate a percentage of their properties being built in an estate to be available as rent to buy.
This means there will naturally be limited locations and numbers of these properties available.
In many areas availability of rent to buy is very limited and there may be a waiting list so it is important to look early and plan ahead, not if you have an emergency need for a home.
How to Find a Rent to Buy Property
Rent-to-buy schemes are offered by housing associations and housing developers.
Some property portals like On the Market help buyers find suitable rent to buy homes.
In Wales, the Rent to Own website has a list of Rent to Own landlords.
Remember, Rent to Buy may not necessarily be the right kind of scheme for you. Also, consider other options such as Help to Buy, shared ownership, renting privately and then saving to buy a different home in the future to see how they compare.