Sell and rent back then buy back your home
There is also something called the ‘rent rebate’ that is involved with selling to rent then buying a property back. Basically its when some of the money from the rent that a tenant pays is given to the tenant, after their income has been assessed (annually) and they only pay the net amount. An extra add-on charge may be needed if there are others living with the tenant, who are not working and who are not studying. The tenant may have to sign AST (assured short-hold tenancy) , which means a lump sum is paid from the proceeds from the sale, and 12 months rent, so the tenant lives in it rent free for those 12 months. When renting back and you are at the end of the rent back period, if the price your property is being sold back to you is of less value than what it is really worth, you may be able to negotiate with them, so their solicitors will arrange for your stamp duty, fees and part of your deposit to be paid for you. With this solution, if you have the option to buy back your property once you are financially ok, then the price is agreed between you and the company you are selling and renting back from.
Normally it is a fixed price for a few years only going up 5% each year. Even if the market fluctuates, you should still be able to buy back your property. This could be the best option for you, if you want to keep the property but are experiencing temporary complications. If you decide to sell and rent back your property, you might think that that’s it. But some companies will let you buy the same property back from them, after a pre-agreed period of time and when you have the finances.
One negative aspect is by this time property prices are likely to have increased. However, if you are buying the property back at the current market value, and the prices have inflated then you also get the added bonus of the increased equity tied up in it. When a property is sold to a sell and rent back company, usually an agreement is made about the length and time of the renting, which can be at least one year or however long you want the contract to be. Afterwards you may be given the choice to buy back your property after the rental period.
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