Member Article

Rent to Own scheme builds on success

As the government brings forward its controversial Help to Buy initiative this week, a scheme in the North East which helps local people struggling to get onto the property ladder is proving so popular that a new member of staff has been brought in to cope with the demand.

Stuart Hutchinson, from Easington, has joined Seaham-based Interlet North East as an advisor for its Rent to Own service which was launched just six months ago.

Rent to Own enables potential homeowners to purchase a property with a small deposit of around 10% of the agreed sale price and to move into their new home straight away. They pay an agreed fixed monthly rent and a ‘top up’ which builds up an amount that is used towards the mortgage deposit.

In six months the Rent to Own scheme has helped more than 30 tenant buyers who, for a variety of reasons, have been unable to secure a mortgage either because they have lack of funds for a deposit, are self employed with less than three years of accounts, or if they have a poor credit rating, CCJ or arrears.

To date tenant buyers have acquired properties mainly in the Sunderland and Peterlee areas ranging from two bed semi detached houses in Peterlee for £75,000 to four bedroom detached properties in Seaham for £187,000. The company is now working further afield and are just helping a couple in Bishop Auckland to move into a new house using the scheme.

Stuart, aged 51, began his career as a miner at Easington Colliery at the age of 18. When the mine was closed in 1985 he retrained and gained a Diploma in IT through a company called Resources. He then moved into the property field and worked in sales, negotiator and team leader positions for companies including Keith Pattinson, Reeds Rains and Your Move where he handled customers’ house sales from agreed sale through to completion.

It wasn’t until he himself became a landlord that he came across Interlet North East and was so impressed by the company’s professionalism and forward thinking approach that he applied for the position advertised.

He said: “I am delighted with my new role as advisor for the Rent to Own Scheme – it’s such a great idea and is easy to set up for both tenants and landlords. I am looking forward to helping people who are struggling to get on the property ladder to own their own home and in this climate this is a scheme that will continue to grow across the whole of the North East and I’m proud to be part of that success. The Government’s own Help to Buy Scheme will also hopefully move the housing market forward”.

Established in 1999 Interlet North East is one of the largest letting agents in the region. The company was purchased by the Castledene Group in 2010 which now manages more than 1850 properties throughout the North East over seven branches including Northumberland, Tyne and wear, Cleveland and Durham and which was voted the Sunday Times Lettings Agency of the Year Awards 2013, where the team achieved Gold in the Medium Northern Lettings Agency category. It was also the first company in its sector in the North of England to win an Investors in People (IIP) Gold status.

John Paul, managing director of the Castledene Group said: “Purchase options have been used in commercial and land transaction for hundreds of years but we have only started to see them being used for residential transactions quite recently.

“We have put our own modern twist to the scheme by designing policies that are aimed at being transparent to both buyers and tenants. Although we only rolled out the service in April 2013 we have received a great deal of interest from both tenant/buyers and vendor/landlords alike which has resulted in the creation of a new post. We are delighted to have Stuart on board and look forward to expanding the scheme further afield from across the region.”

Laura Yates, 24, and her partner Stephen Patterson, 29, from Castle Town were the first family to benefit from the service and moved into their new home on Glenegles Road in Grindon in April. Thanks to the Rent to Own scheme they moved into a three bedroom terrace house worth £106,000 along with their two children Ty aged two and half years and Dakota aged 17 weeks.

Laura and Stephen had previously lived with their parents and rented two properties. Stephen works for John E Laing as a builder and they had applied for a mortgage but were rejected on one point on their credit report. They had searched the Right Move website when they came across the Rent to Own service.

Laura, who used to work for Jennings Ford before having children said: “Rent to Own is brilliant for people looking to buy a house. The service is quick and we were able to move within two weeks of us choosing the property. The staff were really helpful and friendly and in five years’ time we will end up owning the property so can make as many changes to it as we like.”

John Paul added: “The scheme also helps landlords who cannot sell their property, possibly due to high existing mortgages, so the conventional way of selling a property may not be appropriate. We are taking on around 30 landlords to test the response which so far has been extremely positive.

“Rent to Own is a great mid to long term exit strategy suitable for accidental landlords or for landlords who wish to have a structured disposal strategy and take advantage of annual Capital Gains Tax exception.

“It’s a ‘win win’ for everyone - the tenant buyer gets to move into a property and can purchase at a time in the future once they are ready and credit worthy, and the landlord gets to sell their property.”

The Castledene Group, which was set up by John Paul in 2008, was also voted Letting Agency of the Year in the North at the Letting Agency of the Year Awards 2012.

For more information, contact Stuart Hutchinson, Interlet North East, 12 Blandford Place, Seaham, SR7 7EL on 0191 5815709 www.interletnortheast.com

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