Why People Sell And Rent Back Their Property

2008-08-29 Word Count: 389 Category: Real Estate

The current property market in the UK is in a strange period of uncertainty that is probably the largest in sixteen years. This has result in a lot of talk in the press about implications of property slump, the reasons it is happening and what the bank of England and the industry is trying to resolve the problems.
A large issue that is the center of discussion it the increase of sell and rent back companies appearing in the market. This new concept has been viewed with some suspicion as people consider the companies to be mixing market sectors.
The general idea of these businesses is that a person sells their property to them for a cash sum and then they rent back the property to the customer for local rent rates. One of the main reasons people do this is to acquire funds to help pay off debts, but there are also other reasons people use companies like these. Reasons such as equity release, divorce or even emigration forcing them to need a quick sale.

The sell and rent back deals do have advantages for certain situations. When dealing with debts, the fact the sale can be completed quickly, means that it helps stop repossession. If someone is using the scheme to release equity, then the benefit is that they can unlock 100% of the equity compared to more traditional equity schemes. The schemes are also beneficial for younger couples and families as equity release businesses usually only deal with older customers that are near retirement age.
Like most things there are also disadvantages to the sell and rent back services. The offer the companies make you will be below market value which can be hard for people to reconcile. But this major factor doesn’t seem to deter the public as numbers of people taking up the schemes are growing and growing.
Customers looking into taking out a sell and rent back deal should do plenty of research into the companies they are dealing with as these services are currently unregulated, which leaves the door open for some dodgy characters to do business.
Like all decisions that affect your financial future, you should do plenty of research and not rush into things. You don’t want to make a decision that you will end up regretting.

This free Real Estate article is brought to you by http://www.articlevista.com

This article was written on behalf of Properties Direct ltd who offer sell and rent back services that offer cash for property in a quick property sale