A recent survey taken by one of the largest sell and rent back companies in the sector have shown that they expect around 50,000 customer enquiries before the end of 2008. This shows a large increase in comparison to 2007 where they received only 36,000 enquiries. With results like these it looks like the sell and rent back sector will be on the increase over the coming years.
The credit crunch has been blamed for the increase in people looking to sell their property for cash as unfortunately they can’t keep up with their mortgage payments or sell their property (unless they are willing to lose a decent percentage.)
Sell and rent back schemes are largely used by people who are either in debt or urgently needing to get hold of some cash. Selling their homes to then rent it back seems like a good option as in some cases it helps avoid repossession. Most of the time the customer will receive around 80-90% of the value for their home, this will be made available to rent immediately so that they don’t have to move out.
There are worries that some companies will try to purchase the property for 60-70% of the house value before renting it back to the ex owner at a high monthly price. Because this high monthly rate will be decided in a long term contract this unfortunately will keep the ex owners tied to their old property making the company owning it rich. Unfortunately due to a lack of regulations legitimate companies are being tarred with the same brush and on the whole most of these sell to rent back companies work ethically and maintain a high standard of customer service.
