In the United Kingdom, a challenging housing market, characterized by high mortgage rates, concerns about job security, and strained finances, has led to a significant number of unsold homes, particularly new builds. This has prompted a rise in alternative homeownership schemes, such as rent-to-buy, to help families navigate the path to owning a home.
The share of new-build homes sold before completion fell to a 12-year low in 2025, according to estate agent Hamptons. Concurrently, some landlords are divesting properties due to stricter regulations like the Renters' Rights Act, which limits their ability to evict tenants or increase rents. This has resulted in a surplus of former rental properties available on the market.
For many young families, the dream of homeownership is hampered by the difficulty of saving a substantial deposit. Luke and Hollie Brayne, both 24, found their £25,000 savings insufficient for a 10% deposit on a three-bedroom house in West Sussex. After the birth of their son, Harvey, they sought their own space and opted for a rent-to-buy scheme.
Rent-to-buy, popular in the United States but less known in Britain, allows renters to occupy a home as tenants for a fixed period before agreeing to purchase it. This model benefits individuals with less-than-perfect credit scores, those new to the country lacking a long financial history, or the self-employed needing to establish several years of accounts for mortgage eligibility.
The Braynes are participating in a scheme run by BeHomed, which connects potential tenant-buyers with landlords looking to sell properties. Industry research indicates that over 30% of landlords plan to sell all their rental properties, with an additional 18% intending to sell some. Selling to a tenant provides landlords with a near-guaranteed sale, reduces maintenance burdens, and secures a pre-agreed sale price.
The couple moved into a three-bedroom house in Shoreham-by-Sea, agreeing on a purchase price of £440,000 with the landlord. They paid approximately £3,000 in non-refundable fees upfront. The agreed price is higher than the current market value, reflecting an assumption of future house price appreciation—a risk if prices decline. They are not obligated to buy and can reclaim their deposit contributions, minus a 2% relisting fee, if their plans change.
Their monthly rent is £1,700, in line with comparable local properties. A portion of their payment, an additional £150 monthly 'top-up,' is directed into a Lifetime ISA to build their deposit. Combined with their initial savings, they aim to accumulate a £44,000 deposit over five years. Tenant-buyers under this agreement are responsible for maintenance, which the Braynes view as an advantage, allowing them to treat the house as their own.
Sheila Smith founded BeHomed two years ago, inspired by rent-to-buy models in the US. Her company identifies landlords with properties that have been on the market or are vacant, matching them with tenants on her waiting list. Smith notes a significant demand for properties, with tenant interest far exceeding the available listings.
Another company, HomeNow, operates a different rent-to-buy model, purchasing unsold new-build homes from private developers. These schemes typically involve two, three, and four-bedroom houses, with an average cost of £300,000.
HomeNow works with families, often key workers in their early thirties, who have faced financial pressures despite good incomes. Cris and Jerlyn Jocson, both 36, who relocated from the Philippines to the North West of England for work, are one such family. After a negative experience with a rental property, they sought a more secure home for their daughter.
Initially skeptical, the Jocsons contacted HomeNow after discovering the company online. New residents in the UK can face challenges securing mortgages due to a lack of established financial history. HomeNow's model involves a two-year lease with income and credit checks to ensure future mortgage eligibility, coupled with a 'Home Purchase Plan' outlining the obligation to buy.
This model has been described as similar to Personal Contract Purchase (PCP) for cars, though with an obligation to purchase the property. At the end of the lease, tenants receive a 'rental refund' equivalent to 5% of the property's value at that time, which can be used as a deposit. If the property's value increases, the refund amount grows.
The Jocsons moved into a three-bedroom home valued at £275,000 in Deeside in December 2025. They pay £1,718 per month in rent. If the property appreciates by 5% over two years, they would purchase it for £288,750 and receive a £14,500 rental refund towards their deposit.
Mortgage brokers advise that these schemes address a genuine need but require careful understanding. Nicholas Mendes, a broker at John Charcol, emphasizes that these are structured agreements, not casual trials. He highlights the importance of assessing long-term mortgage eligibility and understanding all terms, including maintenance responsibilities and potential financial outcomes if property values change.
Potential buyers are advised to compare these schemes with traditional mortgage options, smaller deposit products, shared ownership, or the possibility of saving for a longer period.