Stop repossessions – that’s the call from the Lib Dems, as they present their proposals to halt the decline in the UK housing market and support families struggling to meet their mortgage obligations.
Slating the Prime Minister's efforts to help suffering homeowners as "feeble", Lib Dem economic supremo Vince Cable endorsed ‘sale and rent back' schemes as part of his party's solution to help ease current repossession levels. Under the new Lib Dem proposals, the introduction of a regulated 'Mortgage Rescue Scheme' would enable families struggling to meet mortgage demands to sell all or part of the equity in their property to private companies or Housing Associations.
Stopping repossession – FSA regulation on the way?
While acknowledging sale and rent-back schemes are already available in the mortgage market, Mr Cable warned that such arrangements can leave homeowners exposed to disreputable companies. To counter this problem, the Lib Dem proposals advocate the introduction of proper regulation by the FSA, without which those people needing to sell will remain vulnerable and will receive little or no protection from eviction, as well as having to potentially contend with over-priced rents, undervaluation of their property and be exposed to poor advice. FSA regulation of the industry, argues Mr Cable, would build confidence in the sector, allowing homeowners a number of options if faced with repossession.
The sale and rent back lifeline for avoiding repossession
Sale and rent back schemes enable homeowners who are struggling to service their mortgage and other debts to sell their properties and then rent them back at market rates. Homeowners can use the cash to settle their existing mortgage and any outstanding debts, allowing them to avoid repossession and remain in their own home. In some instances, there's even the opportunity to buy the house back at market value at a later date.
Stop the repossession of your home and keep living in it
The main obvious advantage to homeowners of choosing to sell and rent back their home is that they don't have to move, meaning they can carry on living the rest of their lives as normal without having to deal with the stress and disruption that a move of home can bring. And in many cases discretion is assured, meaning that neighbours need not know there has been any change in status.
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