Homeowners struggling with financial difficulties and facing home repossession are continuing to suffer from a lack of companies offering Sale and Rent Back schemes (The Guardian). The schemes were developed to help those hoping to sell their property and stay in renting it back to be able to do so under a secure tenancy and with sensible rental terms. This meant all secured loans would be settled enabling the homeowner to relax safe in the knowledge they would not lose their home.
Unfortunately, in it’s infancy the Sale and Rent Back industry suffered from a large number of unscrupulous property buyers who were more interested in simply buying property at a rock bottom price. They would then often use various tricks to force their own repossession of the property in order to then sell it on in the open market for a quick profit. This gave the Sale and Rent Back market a poor reputation and meant those wanting to build a sensible business had an uphill struggle.
Fast forward to June 2010 and the industry rightly came under the watchful eye of the Financial Services Authority (FSA). With the new full regulation came a new set of strict rules that meant a homeowner could only go down the route of selling and renting back in the event they had no other choice. What’s more they had to be able to clearly demonstrate that talks with lenders had been unfruitful. This all came at a time when interest rates were relatively low and lenders were under Government guidance to offer struggling homeowners the chance to get their mortgage payments back on track. The net effect was a hugely reduced Sale and Rent Back market.
At the time we were at the forefront of the Sale and Rent Back market as letting agents in Nottingham building a solid reputation for offering a credible rent back product with a fair and open tenancy agreement at it’s core. As a result of our on-going work, Sell and Rent Back Today’s Managing Director, Garry Slater was invited by the BBC to answer a number of questions on behalf of the industry by the well known TV presenter Angela Rippon. You can find the full interview here
Having recently reviewed the market we can see that there is no real change in the number of providers currently offering Sale and Rent Back agreements. Our thoughts are that this will continue to be the case until such time as regulations are relaxed. Those that still remain in the market appear to work as lead generators passing contact details to the few providers for a finders fee.
Should we hear anything more we’ll be sure to keep you posted.
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