Dino D said:
Scenario: property worth 500k (market valuation from surveyor).
Tenant paying 1,500 rent pm.
Tenant proposes to buy property for 520k by paying as follows:
15k down now.
1,500pm 'rent' over 5yrs (to be deducted from sale price) = 90k.
After 5yrs 415k remains to be paid.
Tenant proposes to get mortgage for that balance.
This doesn't make much sense. as others have pointed out, if £1,500 per month is the fair cost to live in the house with no further obligations on each side, then why are you going to start reducing the price of the house when it's sold later? Rent paid is not savings for him, it's payment for use of your house. If you want to sell it in five years, why not keep renting it out for five years, and then sell it in five years for the market value?
Do you really think that it'll on;ly be worth £430,000 by then?
Another way to look at this is that you are neglecting the tiime value of your money. Ignoring the (small) effect of getting the deposit today, you could sell it upfront for £500,000, put that money in a 5 year bond at 4.6%, and have £615,000 in your hand at the end, without any headaches inbetween.
You'd lose out on the rent, of course, but that's still massively better than your idea.