Press Release Summary: Many companies now offer 'sell and rent back' plans to homeowners who want to get at the cash tied up in their property. These plans can be ideal for some people, but you need to know exactly what you're getting in to; and who you are getting involved with.
Press Release Body: If you are, get the FULL picture first - getting it wrong could cost you thousands of pounds.
Many companies now offer 'sell and rent back' plans to homeowners who want to get at the cash tied up in their property. These plans can be ideal for some people, but you need to know exactly what you're getting in to; and who you are getting involved with.
Rising popularity of 'Sell and Rent Back' plans
Soaring interest rates last year have left many homeowners struggling to meet their commitments. Job loss, ill health, relationship breakdowns are also a major cause of people finding themselves unable to cope with their debt. And if they are not careful, repossession can often become a real possibility.
'Sell and Rent Back'plans can be a quick fix allowing homeowners to raise the cash they need without hassle, costs and months of delay associated with selling privately.
But it isn't always the only or even the best solution to the problem.
Who decides the property value?
Sell and rent back companies generally offer between15-30% below market value. This discount allows them to offer the seller a lower rent - but who decides the market value? It's the company making the offer so it's in their interest to give a low valuation. Make sure the valuation will be completed by an independent Chartered Surveyor. It's also important to make sure the Surveyor inspects the interior of the property. A 'drive by' valuation, where only the exterior is inspected, will almost always produce a lower valuation than an inspection that includes the interior. Normally the seller pays for the valuation fee but this is refunded in full on completion of the sale.
Beware 'free' or high valuation fees
Those companies who give a 'free' valuation, value the property themselves so it's in their interest to give a low valuation. Other companies charge a high valuation fee at the outset and guarantee to make you an offer. But once you've paid your fee, they sometimes offer a very low amount and don't refund the valuation fee. These companies know that very few people will accept their offer so they actually make their profit from the valuation fees. Be sure to ask for a guide price before you agree to pay a valuation fee. This way you'll know whether it's something you want to pursue before you incur any costs.
How much will you get?
Some companies decide how much to offer you by finding out how much you need, not what your property is actually worth. Make sure you ask for an estimate of how much you'll receive before disclosing your financial situation.
What are the alternatives?
Reputable companies will explore all of your options with you first. They'll advise you to approach your mortgage lender about a possible solution or to find out if friends or family members can help you.
How well established is the company?
There are now hundreds of companies offering 'sale and rent back' plans, but this is an unregulated market and you need to be sure you're dealing with a reputable company. How long has the company been established? Does it have proper offices, with experienced directors and access to its own capital immediately? Or does the company operate from the buyer's back bedroom and needs to apply for a mortgage in order to buy your house?
If you are considering a sale and rent back scheme, you can obtain a comprehensive free guide outlining the pitfalls and explaining what you should look out for when speaking to 'sale and rent back' companies. It's been written by Beneficial Homes whose directors have arranged thousands of sale and rent backs and have been in the property business since 1981.
Will Harding, an expert in Sell and Rent-Back schemes at Beneficial Homes. For a detailed advice and a free Sell and Rent Back guide, contact Beneficial Homes team on 0800 195 5085 or go on-line to www.beneficial-homes.co.uk
2025
