Don’t sell your house then rent it back from the buyer. Just don’t. Right?
By Andy Dawson
One of the more vibrant areas of the property market these days is the sale-and-rent-back sector. We’ve all seen the ads for companies that promise to help you clear your debts by buying your house from you then continuing to allow you to live there for a monthly rent.
It sounds like a potential win-win situation if you’re in a bit of a fiscal pickle, but when it comes to an overall victory, the odds are severely stacked against you. Short-term leasing is the biggest concern, and housing charity Shelter are worried that sellers run the risk of eviction shortly after handing over the keys to their home. Not to mention the fact that these companies are taking advantage of the desperate by buying their houses at well below market value in the first place.
But now the Financial Services Authority have come shambling into view, promising to clean up what looks like a pretty mucky business. The only trouble is, all they’ve got is some vague guidelines and a few half-baked promises, with full regulation not due until July 2010. Those crazy bastards!
In a nutshell, if you’re thinking about selling your house then renting it back from one of these companies, don’t. You’ll be leaving yourself wide open to being ripped off. Seek professional advice to find an alternative solution to your money worries.
For more info on the sale-and-rent-back cowboys, check out this excellent piece from lovemoney along with their in-depth investigation from earlier this year.
Posted in Consumer legal, debt, scams July 2nd, 2009 | 3 Comments
feral trolley of the week
When facing repossession by your lender it can be tempting to sell your home to the first buy and rent back company that you come across. However, in the past not all companies were found to be ethical and this has meant that those selling did not get the deal they thought they were getting. Thankfully from 1st July the industry will be regulated by the Financial Services Authority which should work out safer for those wishing to sell. So when selling to avoid repossession choose an fsa regulated rent back company.
My fixed rate mortgage repayment is due to end in April 2010, it is expected to rise from £1024.50 to £1227.50.
I feel I will not be able to make the payments, which is why I am thinking of “sell and rent back” as the only way out.
Not too sure how I found this blog but glad I did find it. Think I was looking for something else on google. Don’t know I agree 100% with what you say, but have bookmaked and will pop back to read to see if you add any more posts. Keep up the good work