The Benefits of Sell and Rent Back Schemes in the Wake of the Current Repossession Crisis

In the wake of the current property crisis, homes are being repossessed by the hundreds every week in the UK alone. Many home owners are failing to make their mortgage payments every month due to a variety of reasons including rising interest rates and their fixed rate mortgage’s coming to an end leaving them with their monthly payments doubling in some cases – clearly not good news for any home owner.

While many are left in hopeless situations of which there appears to be no way out, it may well be worth their while contacting a reputable property buyer who can either offer them a very quick sale of their property (and the repossession proceedings stopped altogether) or a quick sale and rent back of their property, meaning they will have the ability to remain in their home not as a home owners but as a tenant at the same time as avoiding repossession.

Surprisingly (and unbeknown to a lot of people), the repossession proceedings can be stopped even in the very latest stages if a property buyer gets involved. These companies are experienced in stopping repossessions and manage to successfully prevent hundreds of repossessions taking place on a weekly basis, so you can be sure that if anyone can get you out of your current crisis, they can.

The one thing to look out for is to ensure you get a reputable property buyer (and I emphasize the word reputable). The bad press recently given to the sell and rent back industry has been bought about by a small number of individuals who have failed to fully explain the ins and outs of selling and renting back a property to the homeowner. Unfortunately, this has had a knock on effect on the reputable property buyers out there who genuinely want to help hundreds of people in distress to make the best choice about their current situation. You can use our comparison chart located on our website (follow the link at the end of this article) to help you to judge whether the buyer you are considering fits the criteria of a reputable property buyer.

The idea of sell and rent back is quite basic, the property owner, who for whatever reason can no longer afford to own the property they live in sells the property to a property buyer. The property buyer is different from conventional methods in that they ensure the sale completes within just 28 days (various property buyers differ, but this is our companies current time scale) and a good one will also liaise with the courts on the sellers behalf if they are facing repossession to ensure that the proceedings are stopped immediately. The courts are happy to halt proceedings in most cases as they are aware how quickly a reputable property buyer can move due to their unique purchasing and financing techniques. The homeowner then becomes mortgage free within a month and becomes a regular tenant on an assured short hold tenancy agreement. The property buyer becomes their land lord.

There has also been some bad press lately concerning the fact that a lot of property buyers end tenancy agreements almost immediately leaving the seller homeless. However, do not be deterred straight away, simply ensure that the property buyer you choose is 100% genuine and fully explains everything to you which you need to know. Do not be afraid to ask questions, you have a right to.

Any property buyer worth their salt (us included) can see the great benefits of holding on to investment property for as long as possible even throughout the current climate and beyond. The investors our own company works with actually want properties which they can keep for the long term. The current fall in house prices and rise in interest rates is actually doing the sell and rent back market (and its upcoming customers) a huge favour in that it is weeding out the ‘bad guys’ who are in it only because they once thought it was a good way to raise a quick buck. Those investors are now panicking to sell their investment properties off as they are scared they may loose money – the reputable ones are in it for the long haul, still buying and helping out those in need and not selling a single property. They know that the property market moves in cycles and always has done, and they are not worried by the short term crisis the UK is facing. As mentioned before – they want properties for the long term and do not sell at the first sign of trouble.

There are various reasons why people do choose to sell and rent back their property. Many people want to unlock the value within an asset without having to take on any extra debt. Many people may not be able to refinance (e.g. credit problems, previous bankruptcy, arrears etc) and sale leaseback is the only way to release the money and retain the use of the property. Sale leaseback also gives the previous owner the flexibility to move out and go and do other things without worrying about the property or looking after major repairs.
Here are
just some of the benefits:
1. Repossession proceedings are
stopped
2. Credit rating is not further
tarnished
3. The seller may end up with more money from a property investor as opposed to having the house repossessed and ending up with nothing
4. The seller could reduce his or
her monthly outgoings to a much more manageable level. In many cases the cost of the monthly rent following the sale is less than the previous mortgage payments were.

It is important that if you want to avoid repossession, you contact a reputable property buyer ASAP. Although they can help even at the last minute, obviously the more time you do give them the better the chances of them being able to do something for you.

In my opinion repossession should be avoided like the plague if there is any possible way it can be, and if you have equity in your property that possibility is there. If nothing else, I urge you to get a free cash offer and have a chat to an advisor about your options. As with many things in life, knowledge is everything when it comes to making the right choices.