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Mortgage to rent

The mortgage to rent scheme allows local authorities and registered social landlords to purchase a property from an owner who is facing repossession. The owner can continue to occupy the property as a tenant.

From 16 March 2009, the mortgage to rent scheme has been revised, in order to speed up the application process and help more home owners at an earlier stage. The main changes are as follows:

  • The applicant's lender no longer needs to have started legal action to repossess the property in order for the applicant to be eligible for the scheme. Instead, the applicant must have failed to make full payments to their mortage, or any other loan secured on their home, and have at least one month's worth of arrears in total.

  • An applicant can have no more than £2,000 capital, or £4,000 if s/he is over 60, in order to apply.

This section has now been updated with details of the revised system. However, it may be subject to further amendments as more details are released by the Scottish Government.

How mortgage to rent works

The mortgage to rent scheme forms part of the Scottish Government's Home Owners' Support Fund. The scheme allows home owners who are unable to keep up with their mortgage payments or other secured loans and are in danger of becoming homeless to sell their home to a local authority or registered social landlord, and remain in the property as a tenant. 

Eligibility for mortgage to rent

In order to be eligible for the mortgage to rent scheme, applicants must meet certain criteria. 

Mortgage to rent applications

Before a home owner can make an application to the mortgage to rent scheme, s/he must consult a money adviser. She must then submit an application form, to be assessed by the Scottish Government. This page sets out how the application process works. 

Mortgage to rent and housing benefit

Once a home owner has sold her/his home through the mortgage to rent scheme, s/he may be able to claim housing benefit to help with the cost of renting the property. 

This content applies to Scotland

Last updated: 29 December 2014