Sell and Rent Back Arrangements

In response to recent negative press regarding the industry, Swift Capital Director Steven Harris reveals why sell and rent back arrangements can offer a genuine alternative to repossession – a chance to stay in the family home as a tenant on a fixed rent and possibly buy back the property.

Whilst the National Landlords Association has drawn up a list of 500 ‘bona fide’ operators for its National Association of Sale and Rent Back, Harris believes that self-regulation doesn’t go far enough.

He states, “New trade associations say they want a voluntary code of practice but this just isn’t good enough. The business needs proper regulation by the government or the FSA. The formation of these associations is just a knee-jerk reaction to bad press and their proposed codes of practice won’t stop sharp practice.”

Swift Capital have years of experience and an enviable reputation when it comes to buying residential properties and renting them back to the seller on fixed-term leases from six months to life.

However, Harris is concerned and ‘angry’ that national newspapers and some sale-and-rent-back companies have stated that long-term assured shorthold agreements are not available in the current market. This is not true, he says, as assured shorthold tenancies can be granted for up to 21 years.

“Some companies offer assured shorthold tenancies of six to 12 months and promise, verbally or in non-binding letters, that they are committed to long-term tenancies,” he says.

“In reality, there is no guarantee. The sellers can find themselves with a hike in rent at the end of the tenancy or worse, turfed out of their homes by their new landlord or the investor’s mortgagee if the property is repossessed.”

Read the full Sell and Rent Back article for more.