First Compliant Sale And Rent Back Scheme Launched
Over the course of the past few years, the growing level of personal debt in the UK through personal loans and credit cards, as well as home owner loans which borrowers have been unable to afford, have led to a dramatic increase in the number of borrowers falling into arrears on their loan and facing the prospect of repossession.
This has in turn led to a growth in the number of sale and rent back schemes from companies, which offer to buy an individual’s home, so that they can repay their loan debt and allow them to rent the property back from the company.
Whilst in principle, this may seem like a good idea, there have been growing concerns over unscrupulous companies taking advantage of vulnerable borrowers who may be in a desperate situation with their home owner loan.
As a result of these concerns, the Financial Services Authority (FSA) announced that the sale and rent back sector would become regulated, in order to protect customers looking to take this option. Interim regulation was introduced last year, but the full regulation comes into effect at the end of this month.
Residential Property Solutions has become the first company to launch a sale and rent back scheme which is fully compliant with the FSA rules. The product offers customers 75 per cent of the value of their home and a guaranteed tenancy for at least five years, with the option to buy back their home at any time within the five year period.
Pete Thomson of Residential Property Services said “If a client is experiencing financial difficulties, our fully compliant sale and rent back scheme gives them a five year window of opportunity to get their finances back on track, without the need to move home. Surely, that has to be an option well worth exploring.”
