The demand for rent to own houses have grown strongly over the past 2 years. Many South Africa are still unable to afford to buy their own property and while 100 percent home loans are available on certain types of property purchases (i.e. Bank Repo Houses), banks are still asking most home loan applicant of a deposit to secure the property finance.
To get around the deposit requirement, many more buyers and sellers are agreeing on Rent To Own property deals, and Standard Bank has noticed this trend.
Recently Tested Product – The Standard Bank Rent To Own Houses
Towards the end of 2011, Standard launched an initiative the would help lower income earners to get their foot in the property market. It was aimed at individuals earning between R3 500 and R16 000 a month and properties of up to
Basically, the clients would have to prove that they were able to afford the monthly rental expense for a period of 12 to 18 months, and if they maintained their payments regularly, the bank would grant a home loan to finance the purchase of the property that they were renting.
“The model that we are interested in is deferred ownership for a while … We are just piloting it right now. We have agreed with one developer to put 100 people (properties) on the pilot,” Standard Bank’s director of Affordable Housing Nicholas Nkosi said.