Sale and Rent Back our loved property?

by Readers Question

13:52 PM, 13th February 2017
About 2 years ago

Sale and Rent Back our loved property?

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Sale and Rent Back our loved property?

Last year we had put our house on the market (detached bungalow, Torbay/Devon, 2 bedrooms, open plan with sea view and large new conservatory) to release equity for funding our business. Originally we intended selling the house and moving somewhere else, but since we couldn’t find a suitable and affordable alternative nearby, we now strongly consider staying!sale and rent back

We are fully aware of the problems associated with “Sale and Rent Back”. We learned that apart from private buyers only very few regulated firms are active, and that we will get less money for the house than by a normal sale, but this may still be the best option for us – if we would get a sincere and reasonable offer.

Since, as mentioned, an important reason for selling our house is releasing equity for our business, we can’t afford losing too much by the sale. From internet forums we’ve learned that often 85% are paid on SRB, and sometimes more according to the status of the property. In our case, the property has been completely renovated recently (we invested about £42,000 during the last few years), so no further investments or works are required.

Do you possibly know what they can and cannot do regarding SRB (e.g. Assured Tenancy with fixed term, option of repurchase at a later point in time…)? Or how could we find such buyers?

We will be ideal tenants and keep everything in good order and condition. As mentioned above, we invested a lot of money in the house and love the outcome very much.

Many thanks!

Rain



Comments

Neil Patterson

13:58 PM, 13th February 2017
About 2 years ago

For reference:

The history of sale and rent back >>> http://www.property118.com/the-history-of-buy-to-let-sale-and-rent-back/397/

Rain S.

21:21 PM, 13th February 2017
About 2 years ago

Hi and thanks for the link. The history of sale and rent back includes interesting facts.
Mark Alexander, are you reading this? We would appreciate an up-to-date comment regarding SARB.
We had already learned, that ASTs are not allowed under regulated SRB, only fixed term tenancies (5 years minimum), so buyers cannot mortgage such properties. Hence only regulated cash buyers can offer SRB, correct? (Maybe sometimes they resell later to private buyers who don't want a mortgage - just a nice property investment with permanent, immediate rent income?) The question is how to find such firms/buyers nowadays? Thanks for any help in this matter.

michael fickling

9:15 AM, 14th February 2017
About 2 years ago

Just a thought as i dont know your full circs and im NOT a financial advisor...but.. if youd like to sell and remain in situ..renting why not contact local landlords....you might get some interested and with.....what shall i say..a bit of discount......you might get a taker..especially if you are prepared to commit to market- rent for a decent period and can show the purchaser youd be excellent tenants. ..Local rental agents offices might be able to help.Some lenders are difficuilt on selling to remain in-situ but you can easily find ways around that. Anyway hope you find a good way forward.

yew tree

11:45 AM, 14th February 2017
About 2 years ago

you could try this , I am a member and there a great group
based in St.Marychurch

http://www.devonlandlords.co.uk/

sorry I can't buy not got the money

Dave Driver

12:22 PM, 14th February 2017
About 2 years ago

Reply to the comment left by "michael fickling" at "14/02/2017 - 09:15":

This is very bad advice. Those "Local landlords" that you mention would be breaking the law if they entered into a SARB deal.

The only firms who can do this are the ones who are regulated under the full regulations (not the original interim regulation).

The number of firms regulated were in single figures. Those firms who were doing this had a monopoly and were able to push prices down to around 50-70% of market value.

To the best of my knowledge, the number of firms still doing this is now zero. SARB is effectively dead - killed by over-regulation.

I did some very fair SARB deals myself prior to regulation, but I would not consider doing one now, as it is possible that doing that could land me in jail.

If the original poster is still interested in doing this, the best plan would be to contact the FCA and obtain the (very short) list of regulated companies. Then contact each of those and find out whether or not they are still operating.

The regulations are very strict; even advising on SARB is a regulated activity. Here is a link to the FCA rules:
https://www.handbook.fca.org.uk/handbook/MCOB/4/11.html

Dave Driver

13:06 PM, 14th February 2017
About 2 years ago

Reply to the comment left by "michael fickling" at "14/02/2017 - 09:15":

This is very bad advice. Those “Local landlords” that you mention would be breaking the law if they entered into a SARB deal.

The only firms who can do this are the ones who are regulated under the full regulations (not the original interim regulation).

The number of firms regulated were in single figures. Those firms who were doing this had a monopoly and were able to push prices down to around 50-70% of market value.

To the best of my knowledge, the number of firms still doing this is now zero. SARB is effectively dead – killed by over-regulation.

I did some very fair SARB deals myself prior to regulation, but I would not consider doing one now, as it is possible that doing that could land me in jail.

If the original poster is still interested in doing this, the best plan would be to contact the FCA and obtain the (very short) list of regulated companies. Then contact each of those and find out whether or not they are still operating.

The regulations are very strict; even advising on SARB is a regulated activity. Here is a link to the FCA rules:
https://www.handbook.fca.org.uk/handbook/MCOB/4/11.html

michael fickling

13:33 PM, 14th February 2017
About 2 years ago

Reply to the comment left by "Dave Driver" at "14/02/2017 - 13:06":

Your link relates to "firms" as i read it ??? and their regulation... Im not aware of any law that stops someone renting a home..as a private individual...that they once owned... at an earlier time as a private individual.... and which at the subsequent later point is rented back to them by another private individual who owns it at that later time ?
If there is a law that prevents a private person ...having disposed of a dwelling ever renting it back from any subsequwnt owner id be interested in checking it out . Ive never heard of such a thing...so please advise the relevant statute. Thanks.

Dave Driver

13:51 PM, 14th February 2017
About 2 years ago

Firms includes sole traders.

Rain S.

18:59 PM, 14th February 2017
About 2 years ago

Reply to the comment left by "Dave Driver" at "14/02/2017 - 12:22":

Hi Dave,
I went to https://www.handbook.fca.org.uk/handbook/MCOB/4/11.html
and couldn't find anything about the "minimum 5 years fixed tenancy".
I thought the rent back duration is regulated in that way? (no short ASTs)
And please could you answer Michael a bit more detailed regarding
"private individuals" who just want to rent their second house out?
Thanks.

Puzzler

19:57 PM, 14th February 2017
About 2 years ago

You will find solicitors won't touch them either

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