Reasons for selling and renting back your house
- Live debt free: You can pay off all your debts and carry on living in your own home just as before.
- Stop repossession: Selling and renting back your home can stop a repossession occurring, and you can avoid all the stress and agony of losing your home.
- Move house easily: If you need to move out of your home by a set date most companies will offer a guaranteed completion date, allowing you to move home based on your own timetable.
- Get cash quickly: Selling and renting back your home allows you to get access to all the equity that had perviously been tied up in your home.
Frequently asked questions about selling and renting back
Is ther a time limit on how long can I rent my old house back for?
Usually you can stay as long as you want to, although no guarantees are given to allow you to remain indefinitely. Often though, most companies are happy to allow the ex-owner to stay on for long periods, as they are keen to have responsible long term tenants who will look after the Company's investment.
How will the rent back price offered compare with a valuation from and Estate Agent?
The price offered will depend on many factors, including the type and location of the property, its condition and also the rental potential. Companies will offer a discount off the market value due to their advantage of being able to buy quickly. The level of discount most work to will depend on the specific property, but generally will be around 80-85% of the property's value on the open market.
What will the rent will be if I rent back?
Usually the average market rent is charged, depending on the area. However, many companies will look at each case on an individual basis and will charge rent that is affordable to the tenant.
What will it cost to sell a house to rent it back?
Quite often there will be no fees. The company will pay for your solicitor fees and there will be no Estate Agents' or surveyor's fees.
Do I have to pay a rental deposit when renting back?
Yes. The Company will normally request a one month deposit due at the beginning of the tenancy. The deposit will be repaid when you leave the property (assuming there was no damage to the property).
What kind of a tenancy agreement is used?
Usually the standard Assured Shorthold Tenancy (AST) agreement, which is commonly used by letting agents. This doesn't mean that you can't rent back for the long term. At the end of each tenancy period, a new AST will be signed, subject to both parties' agreement, and you can carry on living in the property.
Do companies rent back to Housing Benefit tenants?
Yes they do. They will rent back to you if you are claiming income support as long as the Housing Benefit Department is happy with this arrangement. Every council is different and you are advised to check with your council directly first.
Will the rent increase over time?
Yes it most likely will. Companies typically fix the rent for the first few years of the tenancy, then the rent will start increasing, in line with the market rent inflation.
What are the costs involved in a person becoming a tenant?
Apart from the rent, tenants also need to pay the utility bills (gas, electricity, etc.) and council tax. Optionally, obviously, if you want to, you can also pay for your contents insurance. After the sale, the Company will be responsible for the building insurance and, in case of leasehold properties, the service charge and ground rent. The Company will also be responsible for servicing the heating system and boiler yearly and deal with any central heating breakdowns.
What about my furniture?
That all remains yours. The Company are basically buying the house from you without the furniture and renting it back to you unfurnished.
Do I need a solicitor for the sale?
Yes. If you don't know one, one can be recommended to act on your behalf and the Company will pay their fees.
How long does it take to sell the property?
Usually about 3 - 4 weeks. In time-sensitive cases most companies can complete much quicker.
If you want more information before you decide to sell and rent back your house, we suggest you contact one of the companies who advertise on this site.
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