Very Quick House Sale

This is where companies offer to buy your house at a discounted rate but promise to let you stay there as a tenant.

For those struggling to meet mortgage payments or facing repossession, this might seem attractive, particularly as these companies offer quick sales. There are many genuine sale and rent back schemes but some cowboys are taking advantage of vulnerable consumers.

They might promise that you can stay indefinitely in the property but then give you only a standard six-month tenancy agreement. They might promise that rent won’t go up but then increase it by a large amount once the initial period is up. Or they might charge you a large fee upfront, and then disappear.

What to do 

Be suspicious of companies offering you a much better deal than everyone else.

For example, promising you much lower rent or offering to pay you 95 per cent of the market value of your home when everyone else is offering 70 to 80 per cent. They could be scammers.

From July this year, the FSA will regulate sale and rent back schemes, so you’ll be able to check if companies are authorised with it. Even then, sale and rent back might not be best for everyone so seek independent advice from an organisation like the Consumer Credit Counselling Service.

If you do go ahead, make sure that you get details of future rent and the length of your tenancy in writing.

You might get as little as 70 per cent of the true value of your home. So, if your home is worth £158,000, you could lose £47,400.