Reponse To OFT's Calls
The Property Buyers, a leading national sale and rent back company based in Nottingham, is backing Office of Fair Trading (OFT) calls for statutory regulation of sale and rent back schemes to provide greater protection for consumers.
As a highly reputable sale and rent back property company representing hundreds of customers across the UK, The Property Buyers has long been concerned that some companies are operating schemes which are treating owner-occupiers facing repossession unfairly by allowing them to sell their home well below the market value and then remain in the property by renting it back without any security of tenure. In many cases people have been given empty promises and found themselves having their homes repossessed and even become homeless within a year, giving more reputable sale and rent back companies like The Property Buyers a bad name.
For homeowners in dire financial straits, the appeal of these schemes is that they can remain living in their property, albeit as a tenant, sparing them the emotional upheaval of leaving their home as well as providing them with urgently needed cash to pay off their debts and minimising any damage to their credit record from having their home repossessed. Although the sell and rent back industry is legal, it is currently completely unregulated.
Baggy Tiwana, managing director of The Property Buyers, says, “We completely support the OFT’s report which states that there should be statutory regulation of the sale and rent back sector by the Financial Services Authority (FSA), especially important in the current economic climate as the number of people facing financial difficulty is on the increase. There are an increasing number of cowboy companies in the marketplace who continue to get away with literally seeking out the vulnerable to ‘plunder and pillage’ them of their homes and make easy money at a time homeowners should be well informed of their options and protected.
“It is high time the Government enforced a code of conduct and standards were defined by the FSA to provide safeguards for customers entering into these schemes. 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) (tenancy agreements for sellers to remain in their home)? 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?
“We make it clear to sellers that we can offer between 25 and 30% below market value because of the current marketplace conditions. This is not only covering our costs (associated sale fees) and the buyer’s but also allows for over valuations from estate agents in what is currently a falling property market.”
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 valuers as well as paying customers’ legal fees up to £500 + VAT.
(Friday, October 17, 2008)