Isn’t it amazing that in a market where low to middle income earners and the young people of today are struggling to buy a first home that companies come along with Rent-to-Buy options. The latest of these to hit the newspaper headlines has agreements between the tenants/owners to pay the company back (not the bank) repayments that are well over home loans rates.
This is just another example of non-thinking and in my opinion the fine print will be the killer that puts these vulnerable people in an even worse state of affairs down the track. Government officials have said that people should be careful to seek legal advice on these agreements. Yeah right! The majority of these people are desperate to get into the market and all I can see is trouble down the track and the only legal advice the majority of these people will seek is when they get evicted for missing a couple of payments 5 years down the track.
The industry as a whole needs to get together and come up with real solutions. Rent-to-Buy, Loans between multiple people (that do not know each other) are all dumb ideas that will only lead to pain and frustration in the future. The next ones will will see roll out will be 40, 50 and 70 year loans from banks.
Government and industry must lead on this issue before and the next 6 months (before an election) is the only hope in the next 4 years of seeing this.