Rent to buy scheme proves a hit

THE simplicity of a rent-then-buy house sale move has seen nervous house buyers come off the fence.

And, up to a dozen house sales in one development may now follow a developer’s no-nonsense pitch, which was advertised in these pages last week.

Developer Ascon Gable has simplified and incentivised a ‘rent to buy’ scheme for its new homes at Castlelake in Carrigtwohill, east of Cork city, where it has sold nearly 300 units out of a long-term scheme of up to 1,600 houses and apartments.

With sales stalled and stock standing still (like many other developers) Ascon Gable this month reduced prices by as much as €30,000 per unit, and followed that up with a win-win rental proposal.

Basically, a buyer selects the house they’d like to buy. They can then rent it under standard rental terms for up to three years, at, say, €1,100 per month. Then, if they decide to buy, all rent paid is deducted from the agreed (and now reduced) fixed purchase price.

“It removes any uncertainty and fears buyers might have in the current market, and gets over the hurdle where many buyers can’t afford to save for a house deposit when they are also paying rent,” says Suzanne Tyrrell of Cohalan Downing auctioneers.

And having rent pay its way towards a purchase rather than being ‘dead money’ also appeals. The scheme also suits those in new jobs, or who have relocated to Cork, and who won’t have a pay history yet to satisfy some lenders, says Tyrrell.

Saving for that elusive deposit has become an even more pressing issue in recent months, as banks will now only typically lend 85% of the purchase price of a property.

Effectively, this way, the rent paid becomes a valuable deposit. If at any time over the next three years a would-be buyer decides not to pursue the deal, they can just up and leave. They vacate the premises and forfeit the rent paid.

Extra ‘carrots’ are also factored in: if a buyer decides to buy after just one year, they get an extra €10,000 discount, or after year two there’s a €5,000 discount.

“We reckon most people will try to go ahead with the purchase after year one or two: this gets people on the road to buying, without any risk or uncertainty. There’s no catch, and no commitment other than a standard rental contract.”

Prices range from €229,000 for a 770 sq ft two-bed apartment, three-bed townhouses are from €279,000 and duplexes are from €289,000.

Four-bed detached homes cost from €430,000.