Officials issue warnings over buy and rent companies
September 18, 2007
Officials have issued consumers warnings urging struggling homeowners to think carefully before turning to buy and rent back companies. These companies specialise in purchasing properties off homeowners and then renting the property back to the homeowners.
For many struggling homeowners that are facing repossession this is one of the only options available to them. However, many former homeowners are being left out in the cold according to recent reports, with a number of former homeowners finding themselves without a roof over their heads.
According to some officials there are some buy and rent back companies that are paying way below the odds when it comes to purchasing properties from homeowners. According to a report from the Citizen’s Advice Bureau one man had to sell his £165,000 property for just £40,000. A recent investigation by the BBC also revealed that some of these companies are renting the properties back to the former homeowners at such high rents that the former homeowner cannot afford to pay and therefore ends up losing the home altogether.
Campaigners are urging regulators to look more carefully at regulating these companies in order to reduce the risk of consumers getting ripped off over the amount that they are paid for their properties and the amount that they are charged in rent. With interest rates rising and monthly repayments rocketing for some mortgage payers, repossessions are on the rise, and for many opting for one of these buy and rent back agencies is the only way out of repossession.
However, consumers should look carefully at the options open to them, and wherever possible should speak to their mortgage lender to see whether a temporary agreement can be reached with regards to mortgage repayments, which could help to avoid repossession without having to sell the home for way below market value.
Alan Wright
17th September 2007
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