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Selling house then renting it back

My friend is going through a separation and has heard of these companies who will buy your home then rent it back to you. It is not possible for either party to 'buy' the other out and as the children will be living with him, he doesn't want to have to disrupt their lives any more than is necessary.

Has anyone here done this? Were there any problems?

Also, he will be in receipt of full housing benefit. Would this be a problem as far as the rental is concerned?
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Comments

  • pennylane99
    pennylane99 Posts: 5,783 Forumite
    1,000 Posts Combo Breaker
    these buy and rent back people will only offer around 70% of the market value for buying the house...
  • these buy and rent back people will only offer around 70% of the market value for buying the house...
    Thanks. I guessed this would be the case.

    Are there any other drawbacks that you know of? Would they be able to live in the house indefinitely or is it impossible to generalise?
    Thanks to everyone who posts comps, I love winning prizes big and small
    :A:A:A:A:A:A:A:A
  • roswell
    roswell Posts: 2,447 Forumite
    Theres some posts in here about the subject jsut cant lay my hands on them,

    look at it this way

    House value £100 000, sell to company for £70 000 then pay rent at market value of £100, 000 mortgage + landlord costs (so probably more then there mortgage payement.

    They offer 6 / 12 month AST leases after that they can raise rent / sell the property giving you 2 months notice.

    result company gets house + £30 000 + rent till they sell.

    What do you think your friend will get? they will be beter off selling themselves for 90 % value and renting private.
    If it doesnt pay rent sell it.
    Mortgage - £2,000
    Updated - November 2012
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