The latest news to come out of the sell to rent back market reveals that it is not only those individuals who are on a lower than average income who are turning to companies offering a sell and rent back solution. In the past, the lower income families have been stereotyped as the ones most likely to struggle to maintain their mortgage repayments, which ultimately lead to them falling into mortgage arrears. Of course, they also struggle from month to month to service other bills and often they are unable to catch up on mortgage arrears, which lead to threats of repossession. This of course has led many seeking out a solution to sell their homes as a way of avoiding repossession and many have chosen to turn towards sell and rent back companies as the answer.
However, the Times has brought to light the fact that the middle class, whose income is often substantially higher, may also become a victim to financial worries and may choose to seek out sell and rent back companies.
Larger income, larger financial commitments
While individuals in the middle class may be able to rely on substantially more income per annum, due to their lifestyles they also have much larger financial commitments and outgoings. This of course leaves many in a precarious situation, especially with the credit crunch.
As house prices tumble, many have been left watching in disbelief as the equity in their homes plummet and continue to crumble away before their eyes. The brick and mortar individuals invested in, while being a family home, once provided a security and solid investment for the future. However, that investment is now not so promising and of course, a great deal of money and savings has gone into purchasing the property. For those who are lucky enough to have paid off their mortgage, selling their home at this time while there is still some equity left in it, may be the best opportunity available to them. However, trying to find a buyer today is often a great deal harder than it was a year or so ago due to property being such a poor investment right now. Few out there are willing to take the risk of investing thousands of pounds into brick and mortar only to have it sit there and decrease in value. This is where companies specializing in buying and renting back differ.
By selling this way, the homeowner releases at least whatever equity is left in their home, and this can then be taken and used to re invest in something far more secure than property. Of course, there is the option of being able to rent back the property and remain in it with the option of buying back and becoming the owner again in the future, if they should choose to venture down that road.
Big homes and large salaries often come with high maintenance lifestyles, which many may be struggling to maintain. Those who have found themselves weighed down by their lifestyle costs could choose to sell and rent back for equity release, as opposed trying to re mortgage their home. Re mortgages are a great deal harder to secure now than they once were, which may leave those struggling financially with little by way of options.
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