Sell & rent back

auds.wright

What do you think about the companies who offer to buy your house then rent back to you? Do they offer good deals?

We would like to sell and release the money tied up in out house, but don't really want to move. Our mortgage has 5years left but my husband is 62. House is worth about 95K with around 22K left on mortgage.

dolce_vita

These people who run these companies are generally lying thieves and are best avoided.
They will offer you something like 65k, which after paying your mortgage would leave you with 43k. You are unlikely to be offered much in the way of security of tenure, there will be regular rent rises and you could get evicted.

Are you in a lot of debt?

EdInvestor

You would be better to convert your mortgage into an equity release plan. That would mean you could stay in the property until you die, and cease repayments.You could also withdraw some additional equity, but at your age probably not more than 25-30% of your property value.

These sale and leaseback plans are verging on a scam, though they do have their uses for some people, mainly those facing bankruptcy.

Do you have any pensions that you could access now? You can usually take 25% tax free cash and that is often used for finishing off outstanding mortgages.

Lavendyr

This business is completely unregulated so there are a lot of dodgy companies out there who can and will rip you off. I would advise staying well away.

dealornodeal_3

auds.wright - Your husband is in the same age bracket as myself. Although I dont know your circumstances, I feel that at our time of life; that its a hard decision to make in getting rid of the main collateral. Being selling off Bricks and Mortar. And being left to pay a high Rent, possibly more than your Mortgage.

So if I was in your shoes, I would certainly have a long hard think; before selling up. Good Luck anyway!

greenoak

I guess you leave in the north and I can promise you that if your house is woth 95 k your very best deal is going to be 76k MAX.

Your new rent will be between 350 - 400 per month. Probably 2 or 3 times for than you are paying now.

These deals are only really suitable for people with big financial troubles and almost without any other options left in order to stay in the house.

AVOID

ehs_3

Hi auds.wright

A sell and rent back scheme suitability really depends on your circumstances and what it is you are looking to achieve. For complete security of tenure the only way to release equity is to either remortgage, which I suspect is not something you want to do, or look at equity release options. You would need to study these very carefully in general through an independent financial advisor who can look at the best scheme for your own circumstances.

Yes, there are a number of dodgy people operating in the sale and rent back area, however many are not all like this. I know of several people who are very happy to rent back to tenants who want to stay in the property for a very long time and will also look after the property as it is their home. I can assure you that a good landlord would much prefer this scenario than renting to unknown tenants.

If you do contact any companies, be sure to make sure they do not charge you anything, and be very careful to vet them to ensure they explain exactly what their plans would be. You need to be VERY comfortable with any potential landlord so make sure you ask plenty of questions and be wary of anyone who wants to pressure you into a decision. Take your time to make your mind up as it is of course a big step to take.

Best wishes

ehs

lissa_cook

Hi

I'm producing the 5 live Report for the Julian Worricker programme on Sunday (2nd Sept) and we're looking at sale and rent back schemes. If anyone has any experiences of these firms I'd be grateful if you could contact me on 07818 411 791 or email [EMAIL="lissa.cook@allout.co.uk"]lissa.cook@allout.co.uk[/EMAIL]. I'm happy to talk confidentially.

thanks

Lissa Cook
Senior Producer, All Out Productions
0161 834 9955

NOTE TO PRESS OFFICE - I emailed you last week to try and clear this with you but haven't heard back so am posting direct onto forum. Thanks

silvercar

Lissa, many people who operate these schemes post on singingpig.co.uk.

dboswell

scaremongering, irresponsible, less than objective, sloppy all come to mind of your report. a more balanced approach by you and the BBC would have been more credible.

another reason to money save by ending the tv licence tax which pays for all this nonsense.