Release equity in property and then rent it back.

[TonyRPH]

I was made redundant back in May 2011, and have been unable to secure a permanent job since then (I've been doing various freelance bits and pieces - but this has not brought in a regular healthy income).

We have barely managed to keep our heads above water (no, we *are* drowning really), due to several previous poor financial decisions and living off credit cards* in the absence of a regular income from me (my o/h does work full time).

So..

We have decided that we need to sell our house in order to release the equity, some of which will be used to clear our credit cards.

Without the mortgage and credit card debt, we could easily survive on my o/h's salary.

Obviously, we would need to pay rent - but this will be far less than our current mortgage repayment (see poor financial decisions above).

Our mortgage was on interest only for just over 20 months, but was recently extended by 10 years and switched back to normal repayments, which we can't really afford in our current situation.

So, we feel it would be better for us if we can either find a buyer for the house who will rent it back to us, or just sell it and rent elsewhere.

I seem to recall there used to be companies that specialised in this kind of thing, but I also recall many of them were getting bad press a few years back.

Can anyone offer any specific advice please?

TIA.

• Don't berate me for this - but needs must and all that.

[OscarIndia]

Don't get involved with the purchase and lease back companies. They will give you very little for your house.
If you want to talk through your options and the pros and cons of each send me an email and I will gladly help.

[Burrow01]

Can you see if any local estate agents know of people with a decent BTL portfolio who would be interested in the deal - having a ready made, potentially long term, tenant would be interesting to most BTL Landlords

[Myc]

Burrow01 said:

Can you see if any local estate agents know of people with a decent BTL portfolio who would be interested in the deal - having a ready made, potentially long term, tenant would be interesting to most BTL Landlords

A good idea but beware of their subsequent valuation, I recently sold a house and it would have been a good earner as a BTL so made sure that I got the Estate Agent who specialised the most in Student Lets & General Lettings round to give me a valuation. Suffice to say their valuation was £25K - £30K below the 8 other Estate Agents I got round that Day and £20k below the final sale price.

Her agenda was clear within the first 5 minutes, she already had a BTL Landlord lined up and knew what they were prepared to pay and was trying to push my price down to meet their purchase price.

[Burrow01]

Yep, worth getting it valued before you approach anyone on a BTL basis

One thing to investigate is how much the rent would actually be - this should give you a guide as to the BTL value, and also if you could actually afford to keep living there on this basis

[Zingari]

House price will more often than not always be valued lower with a 'sitting tenant' especially if this is going to be a long term arrangement.

Personally I'd take it on as I cant see me needing to 'convert' the money in the next 5-10yrs but would need to balance that out against what the market value is. PM me if interested

[davepoth]

I'd be exceptionally wary. You could get into the position of paying more for the rent on a property than you are currently paying as a mortgage.

[cerberaperv]

You can`t do this. Sale and Rent back is dead.

http://www.bbc.co.uk/news/business-16872205

Anyone doing it now is doing so illegally.

[996c2]

Zingari said:

House price will more often than not always be valued lower with a 'sitting tenant' especially if this is going to be a long term arrangement.

+1

Best to sell it with vacant possession to get the best price as this is a priority for you at the moment.

Then find an affordable place to rent that will allow you to save a bit for a rainy day.

[hidetheelephants]

Have you spoken to your CC providers about this to discuss possible ways out other than flogging your house?. What about having the CC debt consolidated into the mortgage? It's also worth chatting to Citizens Advice Bureau about it and check out the government's Money Advice site.

Edited by hidetheelephants on Monday 29th July 05:43

[TonyRPH]

Thanks for all the replies.

I'm currently exploring other avenues with a view to retaining my house, and settle the debt by other means.