DESPERATE local first home buyers are turning to “rent to buy” and other schemes in a bid to realise the Great Australian Dream.
As the housing affordability crisis continues to lock young couples out of the market, the popularity of alternative, low-deposit options is soaring in larger centres like Tamworth and Armidale.
Hannah McKenzie and her partner Cameron Tomlinson feared they would forever be caught in the rental trap when friends told them about a house and land package “delayed payment system” run by Hibbards.
“We were both in a good position income-wise but we didn’t have any savings and we didn’t have the capacity to save 5 per cent for a deposit, let alone 20 per cent,” Ms McKenzie said.
“They helped us pay our rent so we could save for a deposit while our house was being built.
“We’ve now been at our house in Hillvue for five months and we love it.”
Hibbards marketing manager Tamzin Pike said the company worked “hand in glove” with potential clients to help them come up with a deposit.
“We can’t help everyone but what we offer is a lot better than walking into a bank and getting rejected,” Ms Pike said.
“We still require a deposit but we help people realise they can get it.
“In most cases people are able to afford it, they just don’t realise it.”
Vendor finance operator Colin Greig has bought a number of properties in Tamworth and Armidale in recent months and sells them under a rent-to-buy model.
He uses hand-painted signs on telegraph poles and online classified sites such as Gumtree to advertise the properties.
“Getting into the market is far too difficult and complicated and there are too many good people missing out,” Mr Greig said.
“I allow people to get in very easily.
“They pay a small deposit and move into the home and we enter into an option to purchase contract, usually set for 12 months but it can be up to 10 years.
“We are very forgiving about a person’s finance history – a lot of bankrupt people go into our homes.”
He denied the scheme relied on tenants paying well above market price for the property.
LJ Hooker Tamworth principal Richie Thornton said while rent-to -buy schemes had their pitfalls, they were suitable for some people.
“I’ve heard some stories about buyers overpaying for properties but I’m not aware of any examples in Tamworth,” Mr Thornton said.
“The simple fact is this: whether you have to beg, steal or borrow, you have to get into the market.
“If the only way you can do it is by rent-to-buy then it’s better than nothing.”