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Monthly rent
Rent pays for your occupation of the property. It does not build equity and is not deducted from the purchase price unless the agreement expressly states otherwise.
Know what you are paying
Rent, option payments and purchase credits explained.
The written agreements must clearly distinguish the payment for living in the property from the payments that may be credited if you complete the purchase.
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Upfront option payment
This secures the purchase option. Under the proposed ASG arrangement, 100% is credited towards the deposit or purchase price if you complete in accordance with the contract.
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Monthly purchase top-up
This is paid separately from rent and accumulates as a purchase credit. It is applied on completion subject to the exact written terms.
Illustration only
How purchase credits could build.
Upfront option payment£10,000
Monthly top-up£300
Top-ups over 36 months£10,800
Potential purchase credit on completion£20,800
Illustration only—not an offer or quotation. Actual figures, term, treatment of payments and mortgage-deposit acceptability depend on the property, agreements and lender.
Agreed purchase price
Fixed for the stated option period.
The agreement identifies the purchase price and the deadline for exercising the option. If the market rises, the agreed price may be beneficial; if the market falls, you could be agreeing to pay more than the later market value.
Ask these questions
- Which payments are purchase credits?
- Are any payments refundable if I do not buy?
- What happens after a missed or late payment?
- Will my intended lender accept the credits as deposit funds?
- What costs are payable on purchase?
Other costs to plan for
SolicitorMortgage adviceValuation and surveyMortgage feesInsuranceTax where applicableMoving costs
These costs are normally separate from your rent and purchase credits.
See whether the payments may suit you.
Complete the application with your available upfront funds and monthly budget.