Help For Homeowners
Help for Homeowners
No longer located tucked away in the backstreets alongside the pawn shops, sale and rent back is fast becoming a respectable business and a viable option in increasingly uncertain times.
In the UK’s current economic climate, more and more people are turning to sale and rent back to resolve financial difficulties using the cash tied up in their home. Once run by cowboys looking for a quick buck, now there is an increasing number of reputable companies looking to offer realistic solutions to people’s problems.
With UK personal debts totalling £1.4 trillion (BBC figures), it is no wonder that struggling homeowners are desperately looking for a quick sale, but is sale and rent back a viable option? Yes, if you approach the right type of company.
The Property Buyers, a leading UK sale and rent back company, has always supported calls for regulation of the industry so that vulnerable people are not preyed upon. The company is one of an increasing number which adheres to a strict professional code of conduct and encourages sellers to explore all their options first before considering selling through a sell and rent back company as a last resort.
Baggy Tiwana, managing director of The Property Buyers, accepts that the sale and rent back sector has been badly affected by unscrupulous operators but says the days of these rogue firms are numbered: “There is a growing public awareness that there are sharks operating on the fringes of our industry and that they must be avoided at all costs. These rogue firms must be rooted out for good and the only way that will happen is through regulation.
“We are scrupulous in the way we run our business. Our advice to all our clients is crystal clear: get your home valued by three reputable established estate agencies and try selling it on the open market first, but if you decide to go ahead with one of these schemes, it is essential to get a number of quotes, fully check out the company and its credit history. Does the company provide Assured Shorthold Tenancy Agreements (ASTs)? Has it got a solvent and proven track record as well as all of the necessary landlord insurances in place? How much under the asking price is the valuation?
“It’s important to us as a provider of such schemes that we always let sellers know all of the options when they are at their most vulnerable. Some ASTs only allow the tenant to live in their home for six months after selling it for anything up to 40% below the market value (BMV) and then they run the risk of eviction if the new landlord also has financial difficulties and can’t repay the mortgage. There are still a huge number of shark companies out there, so it’s essential to know the difference. We make it clear to sellers that we can offer between 18 and 25% BMV depending on the marketplace. This not only covers our costs and the buyer’s but also allows for over valuations from estate agents in what is currently a falling property market.”
Baggy adds: “If used carefully, sale and rent back can be an excellent solution for many people to overcome debt but stay in their own home without anyone in their neighbourhood ever knowing that they have been in financial trouble, plus they won’t have a black mark on their credit history from repossession.”
The Property Buyers is part of the Goldman Hunter Group of Companies, and has a private property portfolio in excess of £16 million with access to cash funds. The company has been operating a fair and flexible sale and rent back option for over 14 years. Customers are always called back within 12 hours and speak to one of the company’s friendly advisors who will take their relevant information and contact details and work with them to provide a solution which is best for them. The Property Buyers do not charge a valuation fee and use independent RICS (Royal Institute of Chartered Surveyors) valuers as well as paying customers’ legal fees up to £500 + VAT.
(Thursday, July 17, 2008)