Rent-to-buy could act as a “dual purpose mechanism” to help with the UK’s housing crisis, according to a new report from CB Richard Ellis.
CBRE writes that by using the private rented sector as an intermediate stage in the acquisition of a property, rent-to-buy could “present developers with a secure exit route for a residential scheme while helping first-time buyers take their first steps towards home ownership”
CBRE reports: “A rent-to-buy product allows a potential buyer to move into accommodation as a private rental tenant, with the option to buy at a pre-agreed price at a later date. The rent accrues to offset against a deposit at the time of purchase, acting as a savings plan for the buyer.
“On completion, the developer could either maintain the development as before or package up the lease into a special purpose vehicle for sale to an investor.”
Jennet Siebrits, head of residential research at CBRE, said: “The transfer of new build stock to the private rented sector has become a more viable and obvious exit strategy for developers because of the subdued sales environment.
“Rent-to-buy is an innovative solution that uses private rental as a facilitator to unblock both ends of the development equation.”
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