Success for sale and rent back tenants

A couple who got involved in a sale and rent back scheme after selling their home to a sale and rent back company which then stopped making the mortgage repayments on the property have enjoyed victory recently, when courts decided that they could continue living at the property.

Sale and rent back schemes have recently come under the jurisdiction of the Financial Service Authority following concerns over the fairness of the scheme and the abuse that former homeowners could find themselves facing.

In many cases homeowners that sold their property to sale and rent back companies, under the impression that they would then be able to stay on in the property by paying rent, have found themselves having to move out of the property within a year of selling.

The sale and rent back firms have come under fire for paying far below market value for the properties, and once they have got rid of the former homeowners selling the property on for a profit.

The court in Birmingham has now given the family from Shropshire a couple of options that will allow them to stay on in their property indefinitely.

They can either take out another mortgage and become the owners of the property again, or they can rent the property directly from the mortgage lenders that repossessed it.

This has been seen as a victory against the unfairness of sale and rent back schemes, which campaigners have been expressing concerns about for some time.

Over the past couple of years an increasing number of homeowners have been considering these schemes after falling behind with repayments in the difficult financial climate or sliding into negative equity as a result of plunging property prices.

Tags: sales, financial, victory, homeowners, sale and rent back, mortgage, abuse, campaigners