Purchase to Lease FAQ

A unique product where BiG will acquire a property on behalf of a third party and lease the property back to them whilst also giving an option to buy the property during the period of the lease.

How does this work?

  • The purchase, lease and option are agreed between BiG and the third party.
  • Third party will be responsible for the acquisition costs including stamp duty; Valuation Reports and both parties legal costs.
  • Third party will contribute a minimum of 10% of the purchase price.
  • BiG acquire the property and simultaneously enter into a lease and option with the third party.
  • Third party pays the agreed lease monthly in advance
  • To exercise the option the third party gives a minimum of 4 weeks notice
    The Third Party pays the agreed option price and both parties costs in connection with the sale.
  • At the end of the term if the option isn’t exercised the lease expires the property reverts unencumbered to BiG.

Circumstances this can be applied?

This product works well in where a significant income can be generated by the third party from the property. This could be added value by splitting an existing property into smaller units, renting rooms individually or running a business, such as a care home, from the property. The income generated can cover the lease and any surplus can go towards the deposit needed to refinance and exercise the option.

Terms?

3 months minimum to 6 years.

Rent?

Equivalent to a minimum of 1% per calendar month of BiG’s total investment.

Property Value

£100,000 to £2,000,000.

Option Uplift

A minimum of 3% per annum uplift will be added to the BiG proportion of the original purchase price.

Geographical Coverage

We will consider providing this product anywhere in England and Wales although it will need to be a property that BiG would be happy to add to our existing portfolio.