Rent Back or Buy Back
Sell and Rent Back - Is There a Better Option?
If you are considering Sell and Rent Back option then have you considered: is this really the right option for
For some people this may be the only option. But for most, this may be the one that reflects panic.
Why some people want to sell and then rent it back?
One reason often given is: 'they do not have to move the house.'
Companies buying the property on rent back basis have to be specialised in this sector. As they are not many
around, they often pay up to £60,000 less than the market value of your property for granting
Imagine getting paid so much less for a bit of inconvenience of not moving. Now, is it really a good idea to
sell and rent back?
Why so few companies are offering this service?
Basically some companies were misleading the sellers into false security. And the Office of Fair Trading (OFT) took
In 2008 the OFT found that some companies were giving misleading details to sellers. Some of the findings
- At the time of sale, sellers were promising that they could remain in the property for a very long time.
However they were granting only 6 or 12 month tenancy agreements. In many cases tenants were evicted after that
period and property sold for a profit or relet at higher rent.
- Some companies offered low rents at the time of sale but then raised the rent substantially soon after.
Tenants could not afford and were forced to move out.
- Some companies were not as cash rich as they made out to be, and defaulted on their own mortgages. This
meant that the properties were repossessed by their mortgage company, and tenant evicted.
With the Council of Mortgage Lenders predicting almost 50,000 repossessions a year, the Office of Fair
Trading (OFT) took steps to protect the home sellers from the 'less than honest' companies. One measure
was to impose tough regulatory conditions on those offering the sell-and-rent back services.
These conditions were so stringent that very few companies could afford to offer this service.
OK, then why these companies are paying so little for my property?
3 reasons mainly:
- These companies do not have to worry about competition as there is not much (count of companies offering
this service is in single digits).
- With so many people wanting to sell and rent back, these companies are spoilt for choice. If one
seller does not accept their offer, there will be another one soon. Which is the reason they are able
to get away with their cheeky offers.
- Finally, they are profit driven, and want to make as much money as they possibly can.
Is Sale and Rent Back the only option?
For many people it may certainly be the preferred option. After all it avoids the inconvenience of moving to
another property nearby. But the real question is: is this the only option?
The other options are:
Sell it Yourself - Find a local estate agent to market the your property. This
approach does take time as the property market is slow. But eventually most sellers find a buyer.
However if you are facing financial difficulties, or already facing repossession and have court date lined up
then there is another option.
Find a Cash Buyer - Someone who can complete the sale quickly. If you do not know someone
personally who can buy immediately then contact us and we may be able to put you in the right direction.
If you already have a repossession order then we can get this suspended. This will give you more time to
sell the property at a fairer price.
If property meets our criteria then we may even buy it ourself - with least hassle to you.
Contact us now for free consultation
*Disclaimer: This should not be treated as advise or
recommendation, simply because we have no knowledge of your personal or financial circumstances. Please take
appropriate professional advise where necessary.
Next: A Worked Example