Sale And Rent Back…The Other Side Of The Argument
Despite a number of warnings from a variety of industry bodies such as the Office of Fair Trading, the Financial Services Authority and the Council of Mortgage Lenders, there has been a large increase in the number of enquiries made by home owners to sale and rent back companies.
These companies offer to buy a property, at a discounted price, from someone who may be facing repossession due to falling behind with their mortgage or home loan repayments and then rent the house back to them, allowing them to remain in their home.
One of the largest companies in the sale and rent back business, Quick Sale, have estimated that the enquiries received by themselves will increase to around 50,000 by the end of the year, compared with only 36,000 during the whole of last year and they are now receiving an average of 4000 enquiries each month this year, with the number increasing all the time. This is hardly surprising as the number of repossessions is soaring as more and more home owners are falling into arrears on their mortgages and home loans.
As we have reported previously, there are major concerns over the sale and rent back sector, with many people selling their homes for much less than the market value and then being forced out of the property anyway and the Office of Fair Trading is currently conducting an investigation to ascertain whether the sector needs regulating, with the results expected at sometime in September.
Glen Ackroyd of Quick Sale has welcomed the prospect of regulation within the industry, claiming that it will enhance the position of reputable companies and get rid of the “rogues” who manage to give the sector a bad name as a whole. He said “With no regulation there is the possibility that clients are vulnerable, it has to be done as best practice and the sooner the better. If you’re an ethical company, it will improve your market share.”
