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There are a number of solutions to help sellers with their situations. One solution is an instrument called a lease option. There are many variants but I will stick with the main two examples, but the structure of them very much depends on your situation and the outcome that suits you best
Although relatively new in the UK, lease options in property have been used in the USA and Australia for over 30 years and also amongst the large property companies who use them for land purchases.
There are two types of lease option.
- Simply a lease option is a combination of a “lease” and an “option”. The lease allows the vendor to rent their property back under a standard tenancy agreement. We then grant the vendor the right but not the obligation to purchase the property at a specific price in the future. This is the option part of the deal. This future sale price is usually today’s full market price and the period to exercise the option is usually between two to five years. During this period, the tenant is responsible for looking after the property as if it is already their own and ensuring rental payments are made on time. Should the tenant choose not to exercise the option to buy the property at the end of the period, then the option will lapse
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The second option is for us to act as an intermediary. You move out of your property and we find you a tenant who wants to initially rent your property and later on purchase it via an option agreement. The benefit here is that you no longer have those mortgage payments.
Due to the flexible nature of a lease option, it is possible to structure it so that it can completely adapt to your circumstances.
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