Don't sell your house then rent it back from the buyer. Just don't. Right?
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.