The Property Buyers

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SELL AND RENT BACK – THE LAST HOUSING PHENOMENON

THE “SELL and rent back” phenomenon is sweeping the country with one on-line property portal reporting it is receiving 30 times more enquiries than it was in early 2007.

Baggy Tiwana, MD of The Property Buyers, the UK’s leading property buying portal, says there has been a “surge” in people wanting to see their homes and rent back.

He says that the Sell and Rent Back scheme is a new housing phenomenon and recently has had its fair share of bad publicity, namely rogue companies buying property between levels of 18% through to – in some cases – 65% of the market value.

Mr Tiwana explains that the scheme is attracting a huge amount of interest from home-owners who see the benefits of releasing equity from their homes and renting back their property.

Sell and Rent Back means that home-owners sell their properties to a company which pays any outstanding mortgages, arrears, and credit card debts that they may have and then the property is rented back t at an agreed monthly rent.

Mr Tiwana said: “From January 2007 through to June 2007 we were receiving 15 to 20 enquiries per month. Since July we have seen this go up to 10 to 15 enquiries a day.”

Research carried out by www.thepropertybuyers.co.uk has revealed a pattern of debt which is encouraging homeowners to sell and then rent back.

Mr Tiwana added: “78% of those we interviewed took out fixed rate mortgages two to five years ago at very favourable interest rates.

“It allowed homeowners to buy property affordably, however as rates have come to an end mortgages have spiralled – one couple who were paying £450 per month on an £80,000 mortgage now pay £895per month with a house hold income of £1300 per month.”

Debt is further compounded by the increase interest rates and in the short term many more homeowners will be looking for such options, he says.

“Some householders are funding essential living by buying food and petrol on credit cards and paying their mortgages with salaries that cannot sustain such debt. After several months of not being able to pay off credit cards some are left with mortgage arrears and the threat of repossession,” he added.

“The Sell and Rent Back option can be a very cost effective way of remaining in your home – but home owners should shop around and negotiate better prices, lower rents, non rental periods, and a fixed price to buy back the house in the future. Although many fear losing their house – this way you do not have to fear losing your home as well.”