New way of house purchase

It sounds good if you assume that property prices will go up ? The fees are pretty rough as well.

Andy

Or if you think they will go down, but you want to hedge your bets?

Novel.

The deal is basically, that if a tenant stays in the property for between 3 & 7 years and pays market rent & for all repairs, the landlord will grant them an option to purchase at a discount of between 18 - 42% (6% a year) of the capital gain over the period.

Seems like one heck of a potential loss for the landlord, just because they don't want to pay for repairs unless of cause the properties in a state of disrepair (although would have thought it must be legally habitable otherwise I'm sure the responsibility would fall on the landlord).

I notice it's an opportunity for Homelet to flog their rent guarantee insurance for 10% of the rent.

AFAIA any Shorthold Assured Tenancy contract cannot remove landlord or tenants rights under the 1988 Housing Act, so this would need investigating.

Daytona

Your belief in the business competence of landlords is truly heartening !

I see it aimed squarely at new landlords sucked into the BTL boom over the past few years; namely those that have taken on large debt for relatively low and broadly static or declining rents, leading to poor cashflow and having insufficient additional sources of income to mitigate this and pay for repairs, refurbishment and unoccupied periods. It is not therefore entirely surprising to see that a supplier of insurance products to landlords has picked up on this by launching this product.

Daytona