Sale and rent back schemes are a disaster
November 4, 2007
CAB officials have expressed concern over sale and rent back schemes, stating that these schemes are a ‘disaster waiting to happen’.
These schemes have been at the centre of controversy for some time, and many companies involved in sale and rent back are targeting consumers that have been hit with the interest rate rises and could face repossession in the near future.
The idea behind these sale and rent back schemes is that the company purchases the consumer’s home and then rents it back to them. This way the consumers gets to stay in the home and does not have to worry about getting repossessed and losing the roof from over their head.
However, there are some serious problems with this scheme, state some experts, and this was highlighted by the Citizen’s Advice Bureau on a recent programme, ‘Tonight’ with Trevor McDonald.
Amongst the problems that have been highlighted by the Citizen’s Advice Bureau are the fact that these companies are paying way below the market value on properties purchased, playing on the desperation of consumers that face repossession, and that there is no guarantee with regards to the length of time that the former homeowners will be able to rent the property beyond the initial six or twelve month tenancy.
A spokesperson from the CAB stated: ‘We’ve got people who are vulnerable trying to stay in their home being enticed into an industry that has no controls on it at all at the moment and that is a disaster waiting to happen. Unless something is done to bring this industry into some kind of regulation to get some sort of framework of quality and assurances for people entering into these agreements, the kind of security tenure they’re going to get, what they are paying and what protection they get against things going wrong, we could see a lot more people really finding they are losing out lots of money and still losing their homes.’
Alan Wright
4th November 2007
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