Home  Real Estate
| How Regulations From the FSA May Help Those Considering Sell and Rent Back Deals | November 5, 2009, 12:56 pm | visits: 0 | wordcount: 508
|
By Allison Clarke
There has been a great deal of controversy over companies offering sell rent back deals to homeowners who are struggling with debts and mortgage repayments.
For those who have missed this, controversy cropped up when the Office of Fair Trading investigated sell and rent back companies and found that some companies were handing out what amounted to false promises on their advertisements. These advertisements came by way of TV, company websites and leaflets dropped through letterboxes. Homeowners were led to believe they could sell for cash and then stay on in the property for as long as they wanted by paying rent that was affordable. However, generally when selling this way there is no guarantee of being able to rent back over the long term. Following the investigation the Financial Services Authority will now regulate the sell and rent back sector to ensure that homeowners get a fairer deal.
A typical sell and rent back deal would come with the company offering to pay between 80% and 90% of the true value of the property. However, it has been revealed that there are companies out there who offer just 60% of the value of the property. Any company who wishes to continue offering sell and rent back deals will now have to agree to regulation by the FSA. This means they will have to follow certain rules and will have to succumb to checks on funding and ownership. This should lead to homeowners considering selling this way to getting fairer and more transparent valuations on their homes.
With more smaller firms and operations jumping onto the sell, rent back bandwagon during the recession, and targeting homeowners who have lost their jobs and who are faced with losing their homes, the regulations cannot come soon enough.
One of the problems with the smaller companies buying homes and renting back is that they lack funding. They buy properties and then act as agents by selling on the property to landlords who buy to let. If the landlord struggles themselves to continue meeting mortgage repayments, then of course those paying rent to remain in the home are again faced with eviction.
Reports of a huge increase in rent after a period of time has also come to light, which has left those with the promise of being able to stay in the property by paying "affordable" rent struggling to meet their rent and again falling behind and being evicted.
Of course, there are companies out there who do have the consumers best interests at heart when they offer sell rent back deals. These companies do not mislead the homeowner and provide all the information needed for the homeowner to make the decision of whether to sell this way or not. In some cases, it is not the companies who are entirely to blame, but homeowners who rush into selling their home without reading the agreement over carefully from back to front. If you are considering selling your home and renting back to avoid repossession then ensure you sell to a regulated company and study the agreement carefully.
Allison Clarke, Freelance Writer. We are committed to providing free helpful information about the real estate market. For more information about the sell and rent back deals visit http://www.cost-prices.com/how-regulations-from-the-fsa-may-help-those-considering-sell-and-rent-back-deals/
Source:www.isnare.com | |
|
|
|
| |
|
| Related articles... | |
|
|
|
|
Set this page as your
home page
Add this page to your favorites:
|
|
|
