Sell and Rent Back Your House Schemes
If you’re looking for a Sell & Rent Back Scheme you can find some common question and answers below.
You should consider carefully if a sell and rent back scheme is appropriate for you and take time to consider many alternatives we discuss on this website.
We are not regulated by the FCA and as such you should not rely or consider the following information as advice. We recommend you visit the FCA website to search for a regulated provider.
What is a sell and rent back scheme?
This was popular until the FCA clamped down on miss-selling from unscrupulous providers in 2013. There are still some companies offering such services and it is namely buying your home and renting it back for a monthly rental payment.
Why did the FCA regulate sell and rent back schemes?
Many vendors were unfortunately miss-sold sell & rent back services resulting in the FCA feeling the need to step in and protect consumers from potential harm. The most common issues vendors faced were:
- Investors promising them a guaranteed lifetime tenancy but only issuing 6 month Assured Shorthold Tenancy (AST) which meant many residents had no long term security as promised in the providers advertising.
- Vendors were often in financial difficulty and potentially more at risk of being taken advantage of. In several published cases vendors felt forced to accept unfair offers on their home.
- Some investors themselves got into financial difficulty resulting in their properties being repossessed. This meant tenants who used to own the property were forced to move out when the banks wanted to repossess the property and sell on the market.
Rules Sell and Rent Back Firms must follow
Since the FCA took control of regulating the market there have been strict rules put in place designed to give you more protection. These rules include:
- Firms can not advertise via door drop leaflets
- Must carry out satisfactory checks on affordability including the effects on any benefit entitlements
- Must offer tenants a minimum five years fixed term tenancy
- Instruct a RICS independent valuation of your home
- Offer you a 14 day cooling off period giving you time to decide if it is the right thing for you
Alternatives options available
Whilst you decide if sell and rent back if right for you, there are also several alternative options.
Sell your home on the market
Selling your home on the market means you can potentially get more for your home and still look for suitable accommodation in the local area.
Sell to national property buying companies
If you needed more support then you can consider using a property buying company. Property buying firms can normally help you find suitable alternative accommodation and may even assist with upfront payments to help put down a deposit or pay off any mortgage arrear.
We hope you found this article useful and please get in touch if you would like us to help sell your home quickly.