Property Rescue Blog

The latest news on home repossessions makes for gloomy reading.  According to The Council of Mortgage Lenders repossession is at its highest since 1999; 27,100 homes were repossessed during 2007 against 22,400 in 2006.  The organisation warns of further rises as we go through 2008 and householders see an impact from rising energy prices and increases in bank lending rates. 

The repossessions figures have led to some political debate about whether lenders are being strict enough in the criteria they apply when giving out loans.  Sparked off by the US sub-prime mortgage crisis, the banks and building societies in the UK will perhaps be a little more cautious when they look at the risks involved in making funds available to new borrowers, especially those who already have other debts or outgoings.   Commentators are warning that borrowers with tarnished credit histories will find it more and more difficult to raise finance, with lenders either flatly refusing them a loan or else heaping on penalty rates to such an extend that the loan becomes unaffordable.

The Citizens Advice Bureau is one of the agencies who often see people at a time of crisis.  They offer free advice to those who are facing any sort of consumer problem or mortgage issue.  The CAB believes that mortgage lenders aren’t always doing everything within their power to help people who are facing repayment difficulties.  They point out that court action should be a last resort rather than a first option and urge lenders to negotiate with their borrowers to find a way through the problem. 

For those facing the threat of repossession it may seem like all the options have disappeared and the inevitable outcome will be the loss of their home.  With Property Rescue this need not be the case.  They can step in at the last minute to stop repossession.  Property Rescue guarantees to make an offer for residential property anywhere in the country, regardless of its condition or location.  Their access to a network of funding allows them to act quickly to make an offer for the property under threat.  The home owner, if they accept the offer from Property Rescue, can either walk away with the cash that remains after their mortgage and debts have been paid, or they can remain in their home as a tenant after the sale has gone through.

Call Property Rescue if you are under any threat of repossession.  Their service just could be the option that allows you to stay in your home and re-build your financial future.

With all the media speculation about a property price crash, the fallout from the US sub-prime mortgage collapse, the hike in repossession rates and the cost of living spiralling, it’s easy to draw the conclusion that people are going off the idea of putting their money into property.

But it seems not!  Us Brits still regard our home as our castle and remain convinced that bricks and mortar are probably the best investment we will ever make.  It was President Theodore Roosevelt that said “real estate is the basis for all wealth”, and according to the statistics, we believe him!  Recent surveys show that although the market is generally more jittery, we remain committed to putting money into buying and improving our homes.

However, the jitters are real and whilst not dampening our enthusiasm for property they have, it seems, made us rather more cautious when it comes to buying and selling.  Houses are remaining on the market for weeks or months, buyers are few and far between and prices are being slashed because sellers are desperate to achieve that elusive sale.

People who need to sell their home fast are faced with a real problem – how to market their house effectively and achieve a sale that won’t fall through at the last minute?  Property Rescue has helped thousands of people who need to shift their property in super fast time.  Because they have access to excellent financial backing they guarantee to make an offer for any home in the country, no matter where it is or what type of property it might be.  If the owner accepts the offer, the sale can go through very quickly indeed.

The owner saves on fees through not having to employ an estate agent and the sale is guaranteed to conclude because the buyer isn’t entering into a chain.  For those who need to relocate to another part of the country, or who are intending to move abroad, or simply need to sell fast for personal or debt reasons, the service offers a real lifeline.

Property Rescue will be pleased to answer all questions in complete confidence.  There’s no charge for a valuation on your home and no obligation to proceed if you decide the service isn’t right for you.  Give Property Rescue a call and sell your home fast!

The UK property market is currently going through its biggest period of uncertainty for almost 16 years. As a result, there is a lot of jargon flying about the press concerning the implications of the property slowdown, the various reasons why it may be happening and how the market and the Bank of England are trying to combat the lull.

One of the major issues currently being discussed at the moment is the rise of sell and rent back companies in the sector. As a relatively new concept, it is open to much suspicion, especially as it tends to blur the lines of the different market areas.

The basic idea is that a person sells their home to a specialist cash buying company and then rents back the property at local market rent. Although debt management is the most talked about motivations for this, there are a number of different reasons that people decide upon this course of action, including divorce, equity release, expedient sales or emigration.

There are advantages to sell and rent back for all of these motivations. Cocerning debt management, the ability for a sale to be completed within 48 hours is advantageous when trying to stop repossession. Property Rescue is also able to eliminate up to 80% of all unsecured debt without using any proceed from the sale, due to a dedicated Debt Management Department, a service offered as part of the package.

With regards to equity release, the main benefit over traditional equity schemes is the ability to unlock 100% of the property’s equity. In addition, most equity release companies only deal with people approaching retirement age, due to their position on the property ladder and equity amount in their home.

The main disadvantage of course, is that the offer on your house will be below market value, usually around 80% off the market price. Obviously this can be difficult for many people to reconcile, but the reason sell and rent back has continued to grow is that although it seems a heft price to pay, the advantages further down the line for peoples finances outweigh the initial discount. Preserving credit ratings or offering a divorcee the opportunity to stay in their home instead of facing a move, tend to take precedent in this situation.

The unregulated nature of the market does it leave it open to unscrupulous traders. It is vital that all efforts should be taken to avoid these companies. A little bit of research usually exposes crooked brokers.

It is vital that when facing a decision that effects your financial future, all avenues are explored. If deciding that sell and rent back is an option that you would like to investigate, ensure the company you are dealing with a reputable and experienced in your situation.

Generally, the completion of a housing sale from start to finish in the UK takes 7 months. Even though the market has seen exponential growth in almost all sectors, the process of selling your home is still a protracted one.

The major drawback of this is that in most cases, the majority of a persons capital is tied up in their home. If a situation arises whereby a homeowner requires instant capital, for example to finance a new business venture, the drawn out nature of selling a property proves a significant hindrance.

Capital release is not the only incentive for an expedient sale. Property chains often hinge upon the completion of a series of sales. Recent figures speculate that 1 in 3 transactions in the UK is part of a chain. The major financial headaches with chains occur when a link is broken. All the non-refundable expenses, legal fees, surveyor fees and estate agent fees are then lost throughout the chain. The primary reason for a chain breaking down is when funds are not available to complete the transaction. The cascading effect of a chain failing can be massive and cost all parties involved a hefty price.

Equally you may find yourself in situation where you are in danger of being gazumped out of a dream home. The property sector has become increasingly competitive in the last twenty years and a recent survey found that 1 in 10 home buyers had been ‘gazumped’ in 2007. Calls for this practice to be made illegal have fallen on deaf ears. The best way to prevent this happening is to sell your own home before making an offer on a new property. Sellers are most likely to consider another offer if there is a delay at the purchasers end.

You may find yourself in a position where you need to sell your home quickly either due to a collapse in a chain, debt management or to take advantage of a business opportunity. Property Rescue is able to complete transactions within 48 hours if the need arises. Although the offered price will be below market value, it may pay dividends further down the line.

According to the most recent BBC report, over four fifths of mortgage lenders believe that there will be 15% rise in home repossessions in 2008. The CML recently reported that in 2007, over 30,000 homes were repossessed compared to 22,000 in 2006.

Repossession is becoming a massive problem in the UK. Defaulted mortgages are contributing to the growing credit crisis that has proliferated to British shores from across the pond. Many people are finding themselves coming to the end of cheap fixed rate loans and the reality of paying standard variable rates is leaving many with a dire financial outlook. The Bank of England is attempting to prop up the housing market with interest rate cuts, but at best this will keep the market static.

The biggest issue facing people with threat of repossession is the devastating effect that it has on their financial outlook. A completed repossession order is severely detrimental to a persons credit rating. The knock on effect of this is that it prohibits affected homeowners from achieving anything close to reasonable interest rates from lenders for future mortgages. As a result, sub-prime mortgages become prospective homeowners only option. The pitfalls of sub prime mortgages have been well documented, as shown with the eventual run on Northern Rock after the markets lost all trust in them. Interest rates of over 11% are widespread in this sector and these mortgages are not to be advised.

Sell and rent back schemes provide an option to stop repossession. Although homes are bought at a discount, the long term benefits of preserving credit ratings could prove financially astute in the subsequent years. Once the debtors are assuaged and your home is secured, you may find yourself in a more sustainable financial position. A buy back option written into the new tenancy agreement will then allow you to re-purchase your house at the rate of the new mortgage.

Any financial decisions made to deal with debt should always take into account future situations. Seeking a quick fix, for example with a debt consolidation loan, will often leave you in a worse financial situation after all the repayments are made. Seek advice from your local Citizens Advice Bureau as to the best course of action before making any major decision on how to repair your finances.

Equity release schemes are usually targeted at the elderly, as a way of generating capital from their property, whilst being able to continue to live in their home.

There are a number of different ways of releasing equity on your home, but the most popular are either a longer term mortgage or a home reversion. A home reversion is where the homeowner sells all or part of their property to a reversion company and gets either an annual return or cash lump sum.

A home reversion can be a used to relieve debt. It provides the homeowner with instant capital which can be used to cover repayments. The downside is that once the capital has covered the debt, the homeowner is often left in a precarious financial position with no equity left in a home they only part own. Re-mortgaging, although a popular choice, often adds to financial distress. In many cases repayments on a secondary loan, when coupled with the payments on the initial loan actually increase the debt.

Current equity release schemes are targeted at the elderly for a reason. Most schemes require the lender to re –pay the loan on death. In a lot of cases, this reduces the estate of their heirs and helps keep inheritance tax down. They are not designed for debt consolidation per se but more to allow pensioners the luxury of benefiting from capital that is tied up in their home without having to move house.

Sell and rent back has emerged due to the increasing need for people to release capital from their homes before retirement age. The unfortunate reality is that for many, this is to deal with financial difficulties. The main advantages of sell and rent back are the expedience of the sale and the ability for the client to stay in their own home and if required, buy back their property once their financial problems have been sorted. The main issue of course is the fact that there is a big discount on the expected market value. But once this is offset by the money saved in interest repayments the discount may not be such a hefty deficit.

Britain’s spiralling debt crisis has led to a sharp increase in the amount of people taking out debt consolidation loans as a way of dealing with financial strife.

The lure of a single monthly payment and a lower interest rate has been too strong for many. On the surface, the benefits are obvious. Although the covering loan tends to be significantly higher than the amount needed for repayment, it usually has a fixed, lower interest rate. The pressures of keeping track of multiple creditors is also relieved by providing the debtor with a single debt source.

But if you dig a little deeper, the full extent of the dangers of debt consolidation become apparent. Many people are tempted into consolidating unsecured debt into secured debt, usually against their home. The loan is usually significantly higher than the debt, which means that failure to pay off the full amount puts the debtors home at risk. Far from dealing with the source of the debtors financial problems, debt consolidation loans only deal with the symptoms. In addition to a large repayment amount, many people are coerced into PPI (Payment Protection Interest), scaremongered into believing that this will aid them in the long term. In 2004 Lloyds TSB had their knuckle rapped by the Banking Code for allowing a man to accumulate £6,000 (a fifth of his final loan) in PPI
 
Before deciding upon a debt consolidation loan, make sure that you do your research into all of your available options. Banks will usually offer a payment plan to those in financial difficulties. This will freeze the debt but severely hamper the debtors credit rating. The debtor will also be prohibited from taking out any further credit form any source.

Sell and rent back is also an option. Although there is likely to be a noteworthy discount on the property’s true market value, there is the luxury of being able to stay in your own home whilst sorting out your finances. There will usually be a buy back option available in the agreement, which allows the client to purchase their house at the rate of the new mortgage. The real advantage of sell and rent back is that it negates the usual peripheral problems of raising capital via a house sale. As their is the option to stay on as a tenant, there will be no need to look for a new home, change schools for any children or even search for a new job.

The biggest advantage that sell and rent back affords, is the ability to stay in your home whilst consolidating debt. The peripheral benefits of this are numerous, as it prevents the need for a stressful move, changing schools for children or even a change of job. The long term benefits of preserving your credit history have previously been mentioned and the short term loss may be prudent when considering the loan term gains.

Sell and rent back companies usually offer a buy back option. The buy back is based on the new mortgage arranged by the company. This allows the client the option of once again becoming owner of their own home.

Unfortunately, the credit situation as it is has forced many people into a financial corner. Creditors have become more and more vociferous in their pursuit of monies owed, governed by the fear of the credit crunch. Repossession orders have increased greatly in the last couple of years, rising to over 120 per day in 2008. In reality, this is not desirable for the lenders as it prevents them from recouping their interest.

Until the market is willing to admit to a fall in house prices an adjust accordingly, the financial difficulties people are facing will not be going away anytime soon. Sell and rent back is not designed as business model designed to rob people of their homes. It evolved out of the pressures created by an irresponsible lending climate, looking to cash in on the massive growth in the property market.

Sell and rent back is not only for people who find themselves in financial difficulty. It is often used as a way of releasing equity from your home, insuring an expedient purchase after a divorce or consolidating debt. It can be open to abuse due to its current lack of regulation, but the reality is that it is in the best interest of the sell and rent back company to uphold it’s agreements. The sector is growing rapidly and will soon come under the jurisdiction of the OFT. Until then, if sell and rent back is an attractive option, ensure that the company you are dealing with is reputable, do your research and be sure you fully understand the intricacies of the business.

The small element of sell and rent back companies that do decide to evict tenants without notice are the same companies that tend to be reported on in the press. One of the advantages of a sell and rent back company is discretion. As a result, it is rare to find anyone who is willing to broadcast their situation and give a different account of their experiences. But the companies that do treat their clients badly are as a result of the de-regulated system and the sell and rent back sector will only profit from some form of regulation.

Make no bones about it, changing form a homeowner to a tenant is an incredibly difficult decision. Especially given the prevailing cultural preference toward owning ones home in the UK. Reports of dodgy companies evicting their clients and limited tenancy agreements do little to assuage peoples trepidation. What should be understood however, is that the limited tenancy agreement is as a result of the mortgage lenders and not the sell and rent back companies themselves. In reality, it would be more beneficial for the company to tie the client to a longer term lease and negate the need for new tenants. The company would also have the added incentive of tenants who are unlikely to let the house fall into disrepair.

Companies that do serve notice on their tenants after a period of months tend to be ‘fly by night’ and are just looking for a quick profit so quickly disappear. It is important to research the company that you are considering working with, to ensure that they are a dedicated sale and rent business. 

There is no getting around the fact that if you decide to use a sell and rent back company, you will be selling your property for BMV or below market value. The rate can fluctuate but the general rule of thumb is a minimum of 80% below market value. The initial loss is considerable but there are mitigating circumstance to consider. For example, if you end up in the position whereby a repossession order is completed on your house, it will be impossible to remove that black mark from your credit history. A poor credit history prohibits you from obtaining reasonable rates on any future mortgage…(cont)

The much publicised property slowdown and credit crunch has forced many homeowners into difficult situations. The cost of living has risen dramatically in the last couple of years and the credit crisis across the pond has only added to the mortgage problems that many people are facing.

As a result many homeowners are finding that their income is no longer significant enough to deal with the mounting debts that accompany their mortgage repayments. Unfortunately this often leads to the homeowner needing a quick sale in order to raise the necessary cash to cover their debt. In the present climate, a quick property sale has become more and more unlikely.

The market situation and new financial difficulties faced by the public due to the American credit crisis has resulted in a growth spurt of sell and rent back companies.  Their encroachment into the property market has not been welcomed by all, especially estate agents and debt consolidation companies. Homes sold under a rent back scheme do not involve estate agents, as the property is sold directly to the company specialising in cash purchases, which obviously bypasses an estate agent fee.

The cash purchase element of sell and rent back also infringes upon the territory of debt consolidation companies, as it would negate the need for a homeowner to take out a loan that is secured against their house.

There has been a lot of conjecture surrounding sell and rent back companies, especially in the press. As a new element of the market, there is still some doubt and suspicion regarding the motives of these companies.

The industry is not currently regulated. As a result, a small number of business are setting up with the intention of capitalising upon the difficulties of others by leading them to believe they have the rights of a tenant and then selling their homes from under them when a better offer comes along… (cont)