Q&A: What are the pros and cons of the rent-to-buy scheme?

Q I am a first-time – prospective – buyer who is having a difficulty getting a mortgage (due largely to the length of time I'm in my current job). I really want my own place and rent-to-buy schemes seem ideal for me but I am having great difficulty getting unbiased information. Any advice on the pros and cons?

AThe difficulty in selling new apartment developments prompted developers to come up with new ways of selling and "rent-to-buy" schemes are a sort of "try it before you buy it" idea. It's fairly simple. You put down a deposit, sign a lease and pay monthly rent in the normal rental way.

Then after an agreed period, usually either two or three years, you can buy the apartment for a pre-agreed price with the rent you’ve paid deducted from that price.

If at the end of the rental period, you don’t want to buy, you get your deposit back (but not the rent of course) and you can move on.

Rent-to-buy schemes appear to differ in detail so some of the things you need to check are: how much of the rent is offset against the purchase price, e.g., if you pay €12,000 per year rent, will the entire amount be deducted from the eventual sale price or only a percentage?

What happens if you need to break the lease – some are three-year leases, which can be a long time for a renter. Is the purchase price fixed at 2009 levels or will they be adjusted to reflect the reality of the market when it comes to actually buying?

Before you sign anything, make sure that you can walk away if you change your mind: remember, these schemes are developer-led so are in their interest; they get a full apartment block and prospective buyers in situ, but what you need to make sure is that you are not locked into renting a place at above market rates (rents are falling) and buying a place at some future date at a price that is above market value.

I want to wait for the Budget before closing a deal to buy

Q If our offer on a house is accepted, how long before we have to actually go through with the sale? We want to hold off until the Budget in case the levels of stamp duty change or property tax is introduced?

AThe closing time – that period between an accepted offer and the actual sale of the property – isn't a fixed period and is dependent on agreement between the two parties involved, the seller and the buyer. Sometimes legal issues that can arise in the process of conveyancing can also have implications for the closing period.

Make your offer but tell the agent you are waiting until the Budget to actually complete; it’s going to become obvious anyway, and remember that an accepted offer isn’t a binding legal agreement on either side – you could pull out at any time before or after December, and so could the seller.

Your questions:Send your queries to Property questions, The Irish Times, The Irish Times Building, 24-28 Tara Street, Dublin 2 or email propertyquestions@irish-times.ie. This column is a readers' service and is not intended to replace professional advice.