Property Rescue Blog

In the simplest terms, BMV is an abbreviation for Below Market Value property. What this means is that the prospective buyers pay less than the expected market value for a property. There is a section of the housing market that specialises in this area and they usually offer a sell and rent back option (at market rent) to the seller, often with a fixed term lease.  

Companies specialising in BMV property usually offer a minimum of 80% below expected retail value. Valuations are normally free and are estimated by examining the local market trends.

There are a number of reasons that people decide to sell their property at below market value. BMV sales are generally paid in cash and offer an expedient sale. Currently, the general turnaround for a house sale in the UK is 7 months and BMV sales can be completed in 24 hours. Also, companies that specialise in this area tend to deal with all aspects of the sale, including dealing with the mortgage lenders.

The rent and sale option is often utilised by people in financial difficulty, as a way of consolidating debt. The main reason for this being that it offers them the security of their own home whilst repairing their financial situation. Repossession orders have increased year on year as Britain attempts to deal with the spiralling cost of living. The advantage of a BMV sale is that it can stop a repossession order and, probably more importantly in the current credit climate, prevents the seller from acquiring a bad credit rating. The CML has recently highlighted that lenders are finding the credit crunch severely limits their members ability to advance the money for a mortgage. A bad credit rating in the current climate may prevent home buyers from achieving a reasonable interest rate.

In simple terms, Sell and Rent back (or Rent and Sale) is when you sell your house and then rent it back at a rental price affordable to you. Typically the reasons people choose to sell and rent back are for equity release, debt consolidation or motivated selling. In most cases, sell and rent back schemes will have a buy back option for the tenant, at the rate of the new mortgage.

The ability to sell your house and rent it back is a viable alternative to equity release schemes, especially if there is a need to generate cash quickly. There may be a case where you are looking to start a new business and need immediate funds as start up capital

The economic slowdown has forced many homeowners into defaulting on their mortgage and has put them at risk of repossession. IVA’s have increased year on year and debt consolidation companies has become an ever present part of the UK’s economic landscape. The advantage of selling and renting your house back, is that you are guaranteed a quick sale and the security of a roof over your head whilst attempting to deal with your financial situation.

For example, if you were looking to sell your property and emigrate overseas, an expedient sale not only releases the required funds, it also gives you the option to rent back for a certain period whilst searching for your new home. The same applies if you are looking to start a new business overseas, also providing a certain amount of flexibility if you decide eventually that you would like to emigrate as well.

Sell and Rent Back in London has been steadily increasing due to its position as the focal point of the economic market. Comparatively speaking, house prices and the cost of living have grown exponentially in London. Debt management is now of growing concern to people in the capital.

The vast majority of Sell and Rent Back companies are based online. The advent of the Internet and World Wide Web have caused many people to ask, “Should I sell my house online?.” The advantages being easy accessibility to the company and a vast array of choice. However it is important to be happy with the company you choose. The need to sell a house quickly often leads to bad choices. Do your research and look for a company that will sell your house online professionally and takes your personal situation into consideration.

As we approach the end of the year it is a good time to look back at the property market during 2007 and look at the current situation.

The year began with what had become a familiar trend of rising prices, which, it seemed, would go on for ever.  But it was not long before some commentators and financial experts were warning of potential slowdown or even disaster in the months and years ahead.  The credit crunch in the US sent shivers through the economy, the effects of which are still with us today and likely to continue for a while yet, whilst bank interest rates rose and mortgages followed suit.  By mid year we were seeing a general slow down in property prices all across the country and in the final quarter of the year prices have begun to fall.

November saw a 1.1% drop according to the Halifax – the 3rd consecutive month of falling property prices.  The Bank of England lowered its interest rate by one quarter of a per cent at its meeting in early December but the effects of this rate cut seem to be limited.  Lending between banks has become very expensive and the Northern Rock crisis has done nothing to bring confidence back to the markets.

As if this weren’t enough, some commentators are predicting that the change in capital gains tax rules, due to come into force next April, will bring a lot of ‘buy to let’ properties back on to the market as investors seek to capitalise on their gains.  The net result of this could be a ‘buyers’ market where the number of homes for sale pushes prices down.  If this prediction is realised, those who took out mortgages during 2007 could find themselves in negative equity situations.

If you need to sell your home fast but can’t find a buyer you might, justifiably, be concerned about what will happen to the market in the months ahead.  For a guaranteed quick sale speak to Property Rescue, who will make an offer on your home within a matter of days, or in some cases just hours.  The price they offer will be a little below market value but it will include the legal fees on your sale, and will avoid the need to prepare a Home Information Pack, which could save you hundreds of pounds.

Property Rescue will be happy to talk to you in complete confidence and make a ‘no obligation’ offer on your property.  If you then decide not to proceed that will be the end of the matter – no salesmen will call, nor will you be pestered by phone calls.  Talk to Property Rescue and sell your property…fast!

The government started to roll out Home Information Packs, or HIPS, earlier this year and from 14 December the HIP will be compulsory for every home owner who wants to sell, regardless of the size of property or number of bedrooms.

The idea behind HIPS is that prospective buyers will have a degree of information at their finger-tips before they make an offer, but the scheme has been criticised heavily by many in the industry as being expensive, cumbersome and responsible for slowing down an already depressed market.  There is also concern that various aspects of the information provided in HIPS, such as local searches, will be out of date by the time the property is actually sold and will, therefore, have to be re-done by the purchaser’s solicitor.  Mortgage lenders and lawyers are unlikely to place reliance on information that might be several months or even close on a year old.

Nevertheless, the law is the law and sellers will have no choice but to comply with the regulations.  In brief, the Home Information Pack will contain the following:

• An energy performance certificate that will rate your property from A to G
• A statement of the terms of the sale
• Copies of the title deeds and any planning and building regulations consents
• Local authority searches, plus those relating to drainage and water

It is difficult to give an accurate indication of what a HIP will cost as they are still in their infancy and therefore subject to market forces.  Realistically however, home owners should expect to pay between £250 and £700 for a HIP to be prepared on their behalf.  One of the main problems seems to be finding an assessor to rate the property’s energy efficiency, as to date few assessors have been accredited in this relatively new specialism. 

Selling your home through Property Rescue will avoid the need to prepare HIPS as the sale will be classified as private.  This could save you up to £700 as well as avoid the necessity of getting solicitors involved before you even put your house up for sale. 
 
Property Rescue quote a price for your home that is the price you will receive; no deductions are made other than repayment of your outstanding mortgage or any loans you may have on your property.  There are no hidden fees, no legal fees on the sale, and no HIPS. 

Give Property Rescue a call to find out more.  They explain everything to you in clear detail and take care of the paperwork and legal necessities.  If at any time you decide not to proceed, you are free to walk away without any obligation.