– When something sounds too good to be true, it often is – E24

– You quickly commit for five to eight years if you want to be sure this is worth it, says Cecilie Tvetenstrand, a consumer economist at Danske Bank.

He talks about so-called “rent-to-own” apartments, a model that has so far been little used, but has stood out as a way to help more first-time buyers enter the real estate market.

Last weekend, E24 wrote about housing giant Fredensborg, which has recently lobbied both the municipality and the state to be allowed to build more such apartments.

– Fredensborg Bolig has chosen to focus on “rent-to-own” as part of our social responsibility and to help more people have the opportunity to own their own home, explains Stian Eide Myhre, Director of Business Development at Fredensborg Bolig, in an email.

But Cecilie Tvetenstrand isn’t so sure the plan is as grand as it may immediately appear.

– When something sounds too good to be true, it often is, he says.

– Depending on price growth

The consumer economist’s objections relate primarily to the long-term perspective that appears to be required to enter into a “rent-to-own” agreement.

– Leases usually last three to five years, so you should first think that you can live there during this period. These homes are aimed at young people who are often in very different stages of life. In a few years, many go from being newly educated and single to having partners and children. If so, will the apartment in question be sufficient?

Also, it appears that what makes the model financially attractive is largely based on house prices rising significantly during the rental period, Tvetenstrand believes.

– If the price increase alone is to help you raise the capital you now lack, you are at the mercy of a solid price increase. You will probably have to estimate up to eight years to be absolutely sure that you are making money.

Hard to save in the meantime

The idea of ​​”rent-to-own” apartments is for home buyers with stable income, but who lack equity, to enter the real estate market.

During the rental period, it is hoped that you can save enough capital to be able to use the right to buy.

However, Cecilie Tvetenstrand believes that this can be difficult, especially when the long term is taken into account in the calculation.

– If you are renting a home that you want to buy three years later, you probably need a little more than you would otherwise rent to be sure you have an apartment that meets your needs five years in advance. So we probably have nothing to do with the more affordable rental prices, and it becomes more difficult to save.

– So would you prefer to recommend a traditional mortgage through the bank you represent?

– I am not going to conclude for or against, I just want to point out that it is important to draw a map of the whole situation before you can convince yourself. All your expenses are quickly locked into one project, and that for many years. So I would advise potential home buyers to talk to the bank and discuss the possibilities of saving enough capital to buy now, says Tvetenstrand.

You don’t need house price pants

Stian Eide Myhre in Fredensborg Bolig, which is owned by Ivar Tollefsen, writes in an email that it is true that rising house prices are one of the advantages of “rent to own”, but he has objections to the point from Tvetenstrand that house prices must rise significantly for it to be a favorable deal.

– Together with DNB and Nordea, we assess applicants’ future potential and savings capacity when we award “rent-to-own” contracts, in which we assume an annual increase in house prices corresponding to the consumer price index about 2 percent. Those with a reasonable chance of obtaining a home financing certificate receive “rent for ownership.”

Myhre writes that Fredensborg is aware of foreclosure in the housing market for people in different life situations and therefore allocates “rent-to-own” houses of various sizes to first-time buyers, single adults, and families with children who need more space.

– In the last round of allocation in Vikhammerstrand in Malvik municipality, 50 percent of households were allocated to single adult women.