BBC investigation into sale and rent companies
Following a series of interest rate rises in the UK over the past year, which has seen the base rate rocket by 1.25% in the space of a year, many homeowners have been left struggling to meet the repayments on their variable rate mortgages, and the level of repossessions in the UK has rocketed in the first half of the year.
Many homeowners are now having to look at alternative ways to try and beat the prospect of repossession, and a number of homeowners have turned to companies that offer to buy your home and then rent it back to you.
However, an investigation by the BBC has revealed a worrying trend amongst many of these companies. According to reports many homeowners that decide to opt for this scheme are ending up homeless, as the companies are charging rent back on the property at such high levels that the previous homeowners cannot afford to stop on their, thus ends up losing the home altogether.
Reports also indicate that many companies are paying way below the market value for the property. For example, according to the Citizen's Advice Bureau one elderly man had to sell his home for £40,000. The property was valued at £165,000. For many this is the only way that they can avoid repossession altogether.
Campaigners are now calling for increased regulations to be brought in when it comes to sale and rent companies, as they claim that many homeowners are being ripped off both in terms of the amount that they are paid for the property and in terms of the amount of rent they are then charged to stay in the property.
13th September 2007
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