Investors who were used to buying distressed property from vendors at below market value and then rent it back to them as tenants can no longer do this as the sell and rent back sector is under the regulation of the FSA - financial services authority.
This means investors can only provide a 'quick sell' solution to homeowners and have to refer their sale and rent back enquiries to a suitable authorised firm in return for a commission.
There are only a handful of FSA authorised companies that are approved for sell and rent back schemes in the whole of the UK which means there is little competion within the market as it stands. Sell and rent backs are a good solution for homeowners who have enough equity within their property to be able to afford the often low offers of approx 65% below market value. If you need to stop repossession of your home or are struggling to meet mortgage payments then schemes like this may be the answer.
Sale and rent back firms are now under the rules of the FSA obliged to give alernatives to sale and rent back so that the client or homeowner so that they receive impartial advice and help.
Homeowners are advised to look into reducing their current mortgage repayments and perhaps changing their mortgage to a more favorable rate to make it more afforable over the long term. A mortgage calculator can be used to check what savings can be used and to calculate the likely monthly repayments. A solution may be in the short term to switch the mortgage to an interest only loan to reduce the monthly payments to a more affordable level.
