Rent to own statistics

According to recent first-time buyer statistics, the typical first-time buyer now takes around 12 years to save for a cash deposit. For many Brits, this may seem like an insurmountable task, which is where rent to own comes in to help.

What does rent to own mean?

Also known as rent to buy, rent to save, and intermediate rent, rent to own is a government scheme that helps provide a transition from renting to owning your own home.

Typically, this scheme lasts five years. During this period, tenants rent a new-build home for around 20% less than the market rate. At the end of the five years, the tenant can buy part of the home under the Shared Ownership scheme, buy the whole property, or move out.

By paying 80% of local market rent rates, the expectation is that tenants will have a better chance of saving for a cash deposit to buy the home.

How does the scheme work across the UK?

England (excluding London)

The rent to buy scheme is primarily available in England; however, this excludes London. In order to be eligible to benefit from the scheme in England, tenants must be employed, a first-time buyer, and able to manage paying rent while saving for a deposit.

Tenants may also be eligible if they are returning to the housing market following a relationship breakdown.

Typically, the rent to buy scheme is managed by housing associations or local authorities. You can search for properties using the government’s Shared Ownership Scheme lookup tool.

Once the tenant has saved enough for a deposit, they can buy any home. The tenant may be able to purchase the home they have been renting if the landlord agrees. If the landlord decides to sell the property during the tenancy, they must first offer it to the tenant at market value.

Tenants may also be able to purchase a home through the shared ownership scheme, if eligible.

London

In the capital, the London Living Rent scheme is in place with the expectation that reducing rent payments will help Londoners save for a cash deposit.

Prospective scheme users must not have a household income above £60,000 and be unable to buy a home in their local area, including through the Shared Ownership scheme.

Rent costs vary from borough to borough in London, but according to the ONS, the typical monthly rent for a two-bedroom London Living Rent home is around £1,240 a month (2024-25). This is equivalent to around two-thirds of the average market rent in October 2023 (£1,877).

To help families, the rent for three-bedroom homes in the scheme will be set at no more than 10% above the cost of renting a two-bedroom property.

Northern Ireland

The scheme works differently in Northern Ireland and is operated by OwnCo Home Limited.

The company purchases the home the tenant selects, and they rent it from OwnCo Home Ltd for three years at market rates. The tenant can buy the property from OwnCo anytime after the end of the first year of renting.

Wales

The rent to own scheme in Wales has now closed to new tenants. However, some properties planned for the scheme are still in the process of being built, and so may become available to new applicants who wish to participate. Prospective tenants should contact a participating landlord in their local area to find available properties.

The scheme lasts up to five years, but the tenant can apply to buy the home anytime after the end of the second year.

When it comes to purchasing the property, the tenant will receive 25% of the rent paid over the duration of the tenancy, as well as 50% of any applicable increase in property value, to use towards their deposit.

Scotland

The scheme does not exist in Scotland.

Top rent to own industry statistics

Over the decade to March 2024, UK Google searches for ‘rent to own’ have increased by 63%, with an interest hike of 13% in the last year.

Of the affordable homes that started construction between April and September 2023, 1,182 were intended for Intermediate Affordable Housing schemes, including Shared Ownership and rent to buy. This is a decrease of 32% from the same time a year earlier (1,737).

In comparison, in the same time period, 3,084 of the affordable homes that completed construction were for Intermediate Affordable Housing schemes – an increase of 1% from 3,063 in the previous year.

A report from the House of Commons Library revealed that the number of people staircasing to owning 100% of the equity in a property is low, with just 4,300 households increasing their share to 100% in 2020-21. This is less than half of the number of households who had bought an initial stake in their home.

Moreover, the number of households able to staircase to 100% represented just 2.3% of all shared-equity homes owned by housing associations.

Renters’ expectations of buying trends

According to the English Housing Survey 2022/23, nearly three-fifths (59.2%) of private renters expect to buy a house at some point in the future. 

A breakdown of the buying expectations of private renters (2022/23)

Of these private renters, over a third (34.5%) - the majority - expect to be able to buy a home in the next two to five years.

When asked if they expect to be able to purchase their own home, the vast majority (85.9%) answered no, however, a not insignificant 14.1% answered yes. It’s likely that at least a portion of these tenants are members of the rent to own scheme, as the ability to purchase the home (whether outright or through housing associations’ right to acquire) is part of the scheme.

For more information on the rental market, explore our UK private rental statistics.