Sale and rent back
agreements allow homeowners to sell their property at a
discount price to a company, which will then rent it back to them at market
rate. Despite the fact that they will sell their home for tens of thousands less
than it is worth, the advantages of sell and rent back
may seem attractive to
borrower in arrears, especially as deals are advertised on the basis that they
can be conducted swiftly and quietly with no need to tell neighbours or even
family.
Do you need to sell your house quickly?
Do have bad debts building and behind on your mortgage payments?
Do you want to stop repossession?
Do you want to keep your home and clear your debts?
Why use our rent back service
- FREE advice
- FREE quote no hidden fees
- NO obligation after our quote
- Our offers are clear we use regulated advisers.
- Avoid rogues who will evict you after 6 or 12 months
Are you in the situation of;
- Mortgage arrears
- Repossession
- Divorce settlement
- Job relocation
- Unemployment
- Emigration
We can help you with giving regulated mortgage advice or arrange for to sell and
rent back your property.
What is sale and rent back
?
Sale and rent back companies purchase people's homes for less than the
market value, typically 60% to 70% - although in some cases even less, generally
paying all fees and costs, and then rent the property back to the original
owners at market rent, or sometimes less than their mortgage payments if these
were lower than the rental value. Homeowners can use the cash to settle their
existing mortgage and any outstanding debts, while remaining in their own home.
Some companies offer the opportunity to buy the house back at market value at a
later date.
Why would someone choose sell and rent back
?
Selling your home for tens of thousands of pounds less than it is worth is not
an attractive prospect. But those fearing repossession due to mortgage arrears
and facing large personal debts may see it as a simple way out of trouble.
Companies heavily promote their ability to complete in a week if necessary,
their payment of legal fees and willingness to help customers sort out their
debts. Most sell and rent back
operators claim vendors may only get 85%
of their property's value by selling on the open market and say they will pay
between 70% and 90%, depending on a surveyor's valuation.
But with sell and rent back
companies generally paying for the survey, there is
an incentive for the home to be undervalued in the first place, slashing the
householder's return to 60% or lower of their property's value.
Firms that offer sale and rent back
also promote discretion, saying that
neighbours need not know there has been any change in status, while families can
stay in the same home and children can continue to attend the same school.
The biggest drawback with sell and
rent back is that homeowners are selling their property for less than
it is worth and will then end up paying the equivalent of the new owner's
mortgage.
In the worst case scenario, a previous owner could find themselves evicted at
the end of a six or 12-month assured short hold tenancy having sold their home
for a bargain price.
Furthermore, some smaller sale and rent back
companies only take the properties
on to their books briefly before selling them on to
buy-to-let landlords. If
that landlord decides to sell, or goes bust, the original homeowner will find
themselves kicked out.
What are the other choices?
Would you sell your home for £50,000 less than it's worth? This is what
sale and rent back
companies would be asking the owner of a
£200,000 property to do if they purchased it at 75% of its value.
If you have to sell up and move then accept that fact. If you need a quick sell
due to debt problems, speak to your mortgage lender. It may be able to find a
cheaper deal, switch you to an interest-only loan, or delay repayments to give
you time to sell.
It is then possible to put the home on the open market at a low asking price and
try and get the best offer possible. If you have to move to a different
property, so be it. Mortgage lenders do not want to repossess homes, it is a
complicated and expensive process for them and they are unlikely to get back a
property's true value.
Details supplied here will be strictly confidential!
Sale and rent back
resources:
BBC report
on Sale and rent back
,
Citiizens advice on Sale and rent back
Wordpress blog
