Should I Sell House And Rent It Back?

By Author: Abbyjohnson
Total Articles: 5
Comment this article

Sale and Rent Back schemes have helped people avoid repossession and stay in their homes but there are aspects to consider.

Sale and Rent Back is the process where a home owner sells his or her house to a company and then gains the right to remain in the property as a tenant. In the United Kingdom sell house and rent back is regulated by the Financial Services Authority and only authorised firms are permitted to provide Sale and Rent Back.

There are things to consider with a sell house rent back scheme.

What are the pitfalls?
• Sell house and rent back schemes buy your home for less than the market value
• If you sell house and rent it back you might still have to leave your home after the initial fixed term has ended or even before that, if you fall behind with your rent payments or break one of the other standard conditions of the tenancy.
• If a sell house rent back firm gets into financial difficulty after it has bought your home, your home could be sold to pay back the firm’s debts.

What are the benefits?
• If you are ...
... a struggling homeowner who does a sell house and rent it back you get stay in your home, avoid the suffering and disruption to yourself family members that being evicted would cause.
• Sell house and rent back allows you to use any remaining equity to pay off other debts.
• Sell house rent back schemes allow you to still enjoy any home improvements or alterations you’ve made to your home.
• If you sell house and rent it back you can avoid the costs of a repossession hearing and eviction. If the property was repossessed and you were evicted, you would still be liable for mortgage payments and ongoing costs until it was sold by the lender.

If you can’t pay off your arrears and are facing eviction it is better to sell the property yourself rather than wait to get evicted and let your mortgage lender sell it. This is because the mortgage lender is likely to get a lot less for it than you would, possibly leaving you with a short fall debt to pay. Properties which have been repossessed often sell for a lot less at auctions where sale prices tend to be lower than market value.

If you sell house and rent it back to a firm you will also get less than your property’s market value but you avoid eviction and can stay in your home for a minimum of 5 years.

In conclusion you should get independent advice and identify how the benefits and pitfalls will impact you. If the benefits outweigh the pitfalls then a Sell house and rent back scheme is probably a good choice for you.

Have you heard about sell house and rent back? Well here at rentback-advice.org we do just that. To learn more about how many people have acted to stop a repossession call us at 0845-053-6699.