- 01
- Aug
Financial advice website, Fool.co.uk has taken a swipe at ‘Sell-and-rent-back’ schemes, claiming they are ‘preying on the poor’.
Donna Werbner, property expert at Fool.co.uk says that the schemes are unregulated and many are unscrupulous.
Whilst the schemes claim to rescue homeowners in danger of repossession, Fool.co.uk claims that the reality is that the firms involved typically offer a purchase price some 15%-20% less than the market value at a time when the homeowners get behind on loan repayments.
“What is particularly shameful about these schemes,” says Ms Werbner, “is that they are targeted at homeowners facing repossession - so people who are at their most financially vulnerable.”
Some families have reported being evicted from their homes at a later date when the ‘landlord’ decides they want to sell the house at a profit. These families may have avoided repossession, but are still losing their homes further down the line with little in the way of funds to make another purchase.
Debt charities are advising customers having trouble in making loan repayments to first talk to their lender before making any move to sell. In some instances a lender will refinance the loan over a longer period or switch to interest-only rather than lose the customer.
