Doors opened for disheartened first time buyers

DISILLUSIONED first time buyers affected by the credit crunch are having doors opened to them thanks to a new nationwide scheme.

Jordan's, a long established letting agency in the North West, is launching Rent- 2-Buy, a scheme for first time buyers, allowing them to rent a property first and then giving them the right to buy at a discount.

Under the new scheme, buyers rent a property for a set time and then agree to purchase it at open market value. Half the rent they have paid is then rebated as a reduction in the amount paid for the property, meaning a smaller mortgage is needed when they come to buy the property they are renting.

In April, the number of new loans plummeted by 36% according to the Council of Mortgage Lenders (CML) signalling a continued reduction in home buying.

Robert Jordan, founder of Rent-2-Buy, said:

"The figures speak for themselves. Banks and building societies are closing their doors to first time buyers that haven't got a deposit. Without at least ten per cent saved up, it's almost impossible to get on the ladder and even then, many mortgage products are poor. To get the market going again and to give landlords a solution to the credit crunch, we have launched Rent-2-Buy.

"Rent can be seen as dead money so this is a perfect way for first time buyers to rent and ultimately buy the property they are renting at a discount. The feedback so far has been fantastic."

The scheme means buyers will be able to take out a smaller mortgage. Homes are becoming available throughout England and Wales and tenancies can be from a year to six years. The longer the rental period, the bigger the discount the tenant gets on purchase.