Sell and rent back schemes are on the increase as more people face repossession and landlords are drawn to below-market value prices.
Sell and rent back schemes are increasingly popular despite recent bad publicity: the sell and rent back industry is being investigated by the Office of Fair Trading. But despite this, The Telegraph newspaper reports that the sell and rent back market can "offer a service which is both ethical and profitable."
Sell and Rent Back – On the Increase
The Telegraph profiled homeowners who had benefited from a sell and rent back scheme. Choosing a reputable sell and rent back company can be a lifeline for some families. In the case of one couple, Roger and Sandra Neale, their home was becoming impossible to keep – Roger had two heart attacks and they were working all God's hours to try and get the mortgage repayments together. A sell and rent back scheme allowed them to stay in their home of 37 years – a home that was full of memories. The sell and rent back firm bought the home for 82% of its market value, and the monthly outgoings dropped drastically. Mr Neale told the Telegraph: "We have a lot of memories in this house...But we couldn't carry on working as we were. From our point of view, it has been perfect."
Sell and Rent Back – Repossessions could hit 70,000 mark
Typically, a sell and rent back firm will offer between 70-85% of the property's value. Rent is agreed and the renter has the same legal rights as any other tenant. Although it isn't guaranteed tenants can stay long-term, in most cases the only alternative is repossession. It's estimated repossessions will hit the 70,000 mark in 2008, so it's no wonder more struggling home owners are tempted by a sell and rent back scheme. For landlords and the sale and rent back companies, it's also offers benefits – the chance to acquire property at a discount price with guaranteed long-term tenants who are likely to treat the property well if it has been their long-term home.
Sell and Rent Back Schemes Ideal for Struggling Home Owners
In fact, the sale and rent back solution is ideal for many home owners – it offers the chance to clear debts and stay put in the family home, which in turn means children can stay in their schools and the emotional upheaval of moving is completely side-stepped.