![Renters](https://www.your-move.co.uk/uploads/blog_post/12_1291_s.jpg?v=165028)
We understand that tenants don't want to rent their entire lives, but often the road to home ownership can be quite daunting.
Here are three ways renters can increase their chances of getting on the property ladder.
1) Build up your credit score just by paying rent
Rent payments are not typically reported to credit bureaus, and as such there has been a common assumption amongst renters that their rental payments can't help them buy a property for themselves.
If you pay your rent in full and on time each month there is no reason not to report your rental payments to a credit bureau to build your credit report.
A lack of a credit record is a common issue for first-time buyers, so reporting your rental payments is a good way to start building one and improve your score in the process.
Experian offer a credit boosting service called 'Experian Boost' and through this service you can report your rental payments, helping build your credit score.
Alternatively, you can use a rent reporting service. There could be a small fee associated with reporting your rental payments.
2) High percentage loan to value mortgages
The up-front costs associated with purchasing a property can deter renters from making the leap into ownership.
One common concern is if renters can afford to front the cost of a deposit.
Your deposit goes towards the value of the property, and the remaining price you receive as a loan which you pay back via your monthly mortgage repayments.
For example, a 60% loan to value mortgage means your deposit is 40% of the property's total market value. For those with less savings, such as renters, a higher percentage loan to value can be attractive as it reduces the upfront cost.
There have been rumours that the government plans to introduce a 99% loan to value mortgage scheme meaning buyers would only need to deposit 1% of the property's value to get a loan, but this has yet to come to fruition.
Yorkshire Building Society are currently offering a 99% LTV mortgage to first time buyers. To put this into perspective, a first time buyer could get a home worth up to £500,000 with just a £5,000 deposit.
95% LTV is more common at the moment due to the mortgage guarantee scheme, with big high street lenders such as Nationwide, Barclays, Natwest, and more offering mortgages for just a 5% deposits - given you meet their eligibility criteria.
Our partner Embrace Financial Services compare deals from over 70 trusted high street lenders so that you can rest assured you've fully explored your options. Book a no-obligation mortgage appointment today.
3) Rent to Buy
The UK government currently have a scheme to encourage renters to become homeowners called the Rent to Buy scheme.
The scheme enables renters to pay a reduced amount of rent to enable them to save for a deposit on a home.
Those participating in the scheme can expect to pay 20% below market rent on their chosen property.
To be eligible you need to be:
- In full or part-time employment
- A first-time buyer
- Able to pay your rent and save for a deposit at the same time
Note that the scheme is only available for properties within the scheme, and landlords may request to see proof of your income and your credit history before deciding if you are eligible.
You can use the deposit you've saved up over the years towards your next home. In some cases, the landlord may be looking to sell and you can use the deposit to purchase their property or enter into shared ownership.
The first step in moving from renting to owning is to see what options are available. Even if you are nervous, an expert adviser can sit down with you and guide you through what choices you may have.
Embrace Financial Service's advisers are friendly and easy to talk to. Book a mortgage appointment today and start thinking about your next move.
Book a no-obligation mortgage appointment
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Your initial mortgage appointment is without obligation. Embrace Financial Services normally charge a fee for their services; however, it is payable only on the submission of your mortgage application. The fee will depend on your circumstances but the standard fee is £549. Complex cases usually attract a higher fee. Embrace Financial Services will discuss and agree the fee with you prior to submitting any mortgage application.
Please be aware that the information provided within these archives has been pre-published, as of the date published on each article. The information contained within, including references to taxation, legislation, regulation, or any other issues or concerns may no longer apply.
![Alex Moore](https://www.your-move.co.uk/uploads/blog_author/12_20_t.jpg?v=27156)
Your Move E-Marketing Executive