Rent-to-buy is bascially where you make an agreement to buy the property at current prices. The catch with this is that property prices may drop further within the next three years and you are stuck with a fixed price agreement and Banks will also only give you a mortgage on current property values. It”s a risk … but then again so is all property investment.
You need to weigh up the pros and cons of paying rent on the property for the next three years. If you don”t buy now you will be renting anyway so at least you have the option to buy at the end of it all. If at the end of the three year period the property is not worth the agreed original price, then you are under no obligation to buy it. However, if you are paying an upfront deposit at the beginning of the rental period, you may lose this deposit. As rents are now falling, it might be an option to just rent a cheaper place for a number of years and save the difference. At least then you will have a bit of cash in the bank and can weigh up the market at that stage.
To be honest you are taking a gamble but if you buy a house now you are taking a gamble anyway. Property buying is a gamble. Just be aware of what you are getting into. Buying a house is the biggest investment you will ever make so do it with your eyes open no matter what the market conditions.
The rent-to-buy scheme definitely has some attractions for those who are having difficulty getting a deposit together. However, you need to be clear about what you are getting into and the risks involved. You may end up buying a place and being in negative equity as soon as you sign for it.
Anyway what is it about the Irish and the obsession with owning property? What”s wrong with renting? Other civilised countries don”t have a problem with long-term renting.