UK Property
by theWatchdog.co.uk

 

Sell and Rent Back

For some people property ownership is a key objective from an early age, it is the piece of security, a comfort factor, knowing that you own you home. But the reality for many is very different. Firstly very few people actually own their home, the property deeds are owned by the mortgage company, in effect the mortgage payments are your rental payments. The problem is with ownership that if you fall in arrears you will be repossessed. On the other hand by renting a property, whilst you can still be evicted for non payment, there are many support systems in place to help people meet their rental payments, such as housing benefit.

When faced with ever increasing mortgage arrears and no sign of how to escape it might seem inevitable that the only option is to allow the mortgage and / or secured loan providers repossess your home. Sadly for many this not only means losing their home but also they will be left with other costs from the repossession and to complete matters their credit history will have been affected making it hard to obtain future credit and even a tenancy contract for renting a new home.

This is where sell and rent back provides an alternative. This is an option where the owner of a house or flat can sell the property to a company who will take on the mortgage debts and then rent back to the home owner. On the downside these companies will buy the property at a discount to its market value, but then they take on the risk of future house price changes and usually they cover all of the fees to complete the sell and rent back. Whilst this may not be an option suited to everyone facing repossession it certainly provides a life line to those burdened with mortgage debts.

If you choose to sell and rent back make sure you take independent advice and only use a company that has been regulated by the OFT (regulation commences 1 July 2009).