Rent to Buy: What it is and How it Works?

Rent to Buy is a government-funded scheme in England outside London where you rent a home at a reduced rent while you save for a deposit. The home is kept as a Rent to Buy home for at least five years, and you may get the chance to buy it, or a share of it.

Buying isn't certain. The landlord has to agree to sell, and you still need a mortgage.

Article updated: October 2026

London has its own version, and Wales, Scotland and Northern Ireland work differently. Each is covered further down.

What is Rent to Buy?

Rent to Buy is a way for working tenants to save towards buying a home by paying less rent while they do it. The money you would otherwise have spent on rent is yours to put aside.

It is one of several affordable home ownership schemes listed by the government. GOV.UK's Rent to Buy guide says the rent is normally 20% below market rent and that the scheme covers England apart from London.

The homes are owned and let by housing associations and councils. Under the Social and Affordable Homes Programme for 2026 to 2036, Homes England funds Rent to Buy homes for working households saving to buy their first home. The rent is capped at 80% of the current market rent, service charges included, and the landlord has to be registered with the Regulator of Social Housing.

The scheme is aimed at people who earn enough to pay a mortgage but find that paying full rent leaves too little each month to build a deposit. Rent to Buy doesn't lend you anything and doesn't give you money towards the house. It lowers your rent so saving becomes possible.

The name gets used loosely. You'll see "rent to own", "intermediate rent" and similar labels. Some describe the government-funded scheme, some describe homes that stay rented with no route to buying, and some describe private deals with very different terms. What matters is the actual offer and who the landlord is.

London has its own version, London Living Rent, run by the Mayor. The Mayor's page says rents are based on a third of local household incomes. Tenancies last at least three years. You can buy through shared ownership during the tenancy, and landlords are expected to help tenants buy within ten years.

The Advantages and Pros of Rent to Buy

The big advantage is the capped rent covered above. The difference between that and the market rent can go into savings.

The other pros of rent to buy are mostly about time and choice:

• You get to live in the home first. You find out what the house, the street and the neighbours are like before you decide whether to buy.
• You get first refusal if the landlord sells. According to GOV.UK's buying guidance, a landlord who decides to sell must give you the option of buying your home first.
• Your savings aren't tied to that house. The same guidance says the money you save can buy any home, including one through another affordable ownership scheme.
• Buying a share is sometimes possible. If the landlord agrees and you meet the shared ownership rules, you may be able to buy part of the home rather than all of it.
• Saving stays your choice. Homes England's funding rules for Rent to Buy let landlords offer savings schemes, but joining one can't be a condition of getting the home.

One thing Rent to Buy doesn't do is cut the purchase price. The discount is on the rent only. If you buy, you pay the market value at the time. Anyone hoping to buy the property at a discount to local market prices is looking at a different kind of deal altogether.

The Disadvantages and Cons of Rent to Buy

The biggest con is that you have no right to buy the home. GOV.UK says you may be able to buy it if your landlord agrees. You still need to be able to afford it, which usually means getting a mortgage.

There are five other cons of rent to buy:

• The price can move against you. You pay the market value when you buy, which GOV.UK says may be more or less than when you first moved in.
• The saving only happens if you save. None of the rent counts towards the price in England.
• You still need a mortgage. A good rent record doesn't mean a lender will say yes when the time comes.
• The rent can go up. Homes England's rules set a maximum yearly rise of inflation (CPI) plus 1%, so the amount you can put aside each month can change.
• Only certain homes qualify. They're set aside on particular developments, so the right home may not be where you want to live.

House prices vary a lot across England. If you're open to moving, our guide to the most affordable parts of England shows how wide the gap is.

Our property investment advice guide covers setting a budget. The monthly costs can differ a lot between Rent to Buy, a smaller home, a cheaper area and a private let. Paying 80% of the rent on a bigger home can still cost more each month than the full rent on a smaller one.

How Rent to Buy Works

Rent to Buy works in three stages: you rent the home at a reduced rent, you save while you live there, and then you may get the chance to buy it.

The five-year minimum applies to the home, not your tenancy. Homes England's funding rules say a Rent to Buy home has to be let at the reduced rent for a minimum of five years. GOV.UK's guide to how the scheme works says your first tenancy agreement will be for up to two years, and the landlord may extend it if you need more time to save.

If you don't pay the rent on time or keep to your tenancy agreement, GOV.UK says you may not be allowed to stay in the scheme. Keep to your tenancy and you can ask to buy once you've saved enough and can get a mortgage. Before the five years are up, it's the landlord's call.

Starting the tenancy can cost money up front. Housing association Citizen, for example, asks for a rental deposit and the first month's rent when the home is let. That rental deposit is separate from the deposit you are saving to buy with.

Once the five years are up, Homes England's funding rules expect the landlord to agree if you ask to buy, except in the most exceptional circumstances. If you don't ask, the landlord can keep it as Rent to Buy, sell it with you offered it first, or turn it into an ordinary rented home. If a housing association wants to end your tenancy, the government says it has to follow the legal possession process, including the required notice periods.

Your tenancy agreement sets terms such as how you can leave. Riverside, for example, lets its tenants end the tenancy at any time by giving notice.

The price at the end is whatever the home is worth then. GOV.UK says you pay the market value at the time, which may be more or less than when you first rented. Some people think about those ups and downs in terms of a housing market cycle, but nobody can tell you where prices will be in five years.

For social housing tenancies from housing associations, including Rent to Buy, the government says the Renters' Rights Act changes start in October 2027. Their tenancies that are not social housing changed on 1 May 2026, as private lets did.

Rent to Buy isn't Help to Buy. Help to Buy was a government equity loan towards buying a home, and GOV.UK says you can no longer apply for a Help to Buy: Equity Loan in England.

Private "rent to own" deals aren't Rent to Buy either. Some private landlords and companies offer a tenancy alongside an option to buy the home later. HMRC's guidance describes an option to buy land as a binding right, granted in exchange for a fee, to buy before a set date. A right of first refusal is different. It stops or restricts the owner selling to someone else, rather than giving you a right to buy by a set date.

HMRC says granting an option and later using it can each count for Stamp Duty Land Tax, which applies in England and Northern Ireland; Scotland and Wales have their own taxes. A private rent to own deal doesn't come with the government scheme's rules, such as the rent cap, because those rules are conditions of Homes England's funding. The contract sets the terms, and a solicitor can say what it actually gives you.

An Example

In this made-up example, a home would rent for £1,500 a month on the open market and £1,200 through Rent to Buy. The difference is £300 a month.

If you set aside that £300 every month for five years, you'd have £18,000 before any interest. That assumes both rents stay the same, which they may not.

Now say the home is worth £250,000 when the landlord agrees to sell. Before buying costs, the £18,000 would leave £232,000 to borrow. If the home is worth more by then, you'd need to borrow more or have saved more.

Buying costs come out of the same savings. GOV.UK's how to buy guide lists solicitor fees, surveys, mortgage costs and moving among them, so the real deposit is smaller and the borrowing larger.

Saving up is the slow, plain way to raise property finance, and it is the one Rent to Buy is built around.

Who is Eligible for Rent to Buy?

In England, Rent to Buy is for people who work, are first-time buyers, and can pay the rent and save at the same time. Those are the three basic tests on GOV.UK's eligibility page:

• you're in full or part-time employment;
• you're a first-time buyer;
• you can pay your rent and save for a deposit at the same time.

There is one exception on the first-time buyer rule. GOV.UK says you may also qualify if you're returning to home ownership after a relationship breakdown.

There's no national income limit. Homes England's funding rules say there is no maximum or minimum household income for Rent to Buy. The point is that you can't yet afford a deposit to buy on the open market, not that you earn below a set figure.

Landlords can add their own conditions. GOV.UK says a landlord may check your income and credit history, and councils and housing associations can have extra requirements. In National Parks, Areas of Outstanding Natural Beauty and on rural exception sites, Homes England's rules let homes go first to people with a local connection.

London Living Rent has different rules. The Mayor's page lists five conditions. You must:

• live or work in London;
• have a formal tenancy, or an informal arrangement with family or friends because of housing costs;
• have a household income of no more than £75,000 a year;
• not own any other residential home;
• be unable to buy a home locally right now, including through shared ownership.

Where Rent to Buy is Available

Rent to Buy is available in England outside London, but only on homes that a housing association or council has set aside for it. GOV.UK says you apply through those landlords for their Rent to Buy homes.

Across the UK, the picture looks like this:

• England outside London: Rent to Buy, through housing associations and councils. GOV.UK's guide covers England apart from London.
• London: London Living Rent, the Mayor's version, with its own income limit and rules.
• Wales: The Welsh Government says Rent to Own - Wales is closed. It worked differently from England's scheme: on buying, you could get a quarter of the rent you had paid and half of any rise in the home's value to put towards the purchase. For buyers of new-build homes, Help to Buy - Wales offers equity mortgages, with applications due by 31 March 2027.
• Northern Ireland: Co-Ownership says its Rent to Own is closed to new applications, though existing tenants can still ask to buy.
• Scotland: England's scheme doesn't apply. The Scottish Government's guide to buying help points buyers to shared equity schemes, where you pay for a share of the home and the government holds the rest, and to shared ownership.

Within England, what's on offer depends on which housing associations and councils build in your area and what they've released. Rent to Buy rents are measured against local market rents, and those differ a lot from place to place. Our guides to Manchester and Birmingham each include a rental market section showing what homes let for in those cities.

How to Find a Rent to Buy Property

You find a Rent to Buy property through the housing associations and councils that own them. GOV.UK's application page points you to the government's shared ownership provider finder to see which organisations have homes in your area.

The finder lists organisations, not homes. GOV.UK says some councils and housing associations also advertise Rent to Buy homes, and your local council can say what's available nearby.

In London, London Living Rent homes are advertised on the Mayor's Homes for Londoners property search.

In Wales, the government still publishes its list of Rent to Own landlords. The scheme is closed, but the Welsh Government says a small number of homes may become available in future.

Rent to Buy is one route among several. Shared ownership lets you buy part of a home now and pay rent on the rest, and saving while renting privately can fund any home you choose. With Rent to Buy you own none of the home until you buy.

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