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Apart from steering clear of contracts with short term tenancy agreements;

Another thing to look out for when dealing with the buy and rent back companies is what mortgage products are going to be available to enable you to buy the property back, should you be in a position to do so, under the terms of your contract.

Arranging a mortgage product becomes complicated when the buy and rent back company buys the property from you at a reduced amount and it states in the contract that you can buy the property back at the amount they paid for it + £?k, especially if the amount they paid + the £?k is below the market value of the property and you also wish to raise the money to cover costs and fees associated with the mortgage application.

For the purposes of a mortgage application this would be considered as a ‘sitting tenant, discounted purchase’ and this is difficult to place with a lender and include fees.

You will need to plan to save the fees required, including stamp duty (if applicable) when you are forward planning using the strategy of any of the buy and rent back proposals.

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LEYBRIDGE LIMITED
Mortgage Broker & Mortgage packager
Specialising in adverse credit.

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Personal FSA No:MJB01557

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I have to admit that I looked at this 12 months ago and my supervisor went mad!

On reflection from what I heard and read I am glad we never went down that road!

I have heard that the Lanlord after 12 months asks the tenant to leave the property and that makes you worse off!

On some shorthold tenancy agreement contracts landlords have been giving notice after only four months

FREE ADVICE IS THE BEST ADVICE

LEYBRIDGE LIMITED
Mortgage Broker & Mortgage packager
Specialising in adverse credit.

Firm FSA No:313790
Personal FSA No:MJB01557

see feedback and testimonials at:
http://www.leybridge.com/testimonial.php
Check out my blog at:
http://mikebdomain.blogs.iva.co.uk/
Please read our Initial Disclosure Document(IDD):
http://www.leybridge.com/Leybridge-IDD.pdf

This is something we need to watch and advise as to the dangers of these schemes!

They can give you notice at 4 months but that notice doesn't expire until 6 months. Just thought I would clear up this because the min tenancy you can have on a shorthold tenancy is 6 months
Rainbow

Every Cloud has a silver lining. At the end of the Rainbow is a Pot of Gold - Or Hope!

Please be careful of these schemes, we considered this 1 year ago before we had heard of an IVA, and I am so glad we didn,t enter the scheme, there has been a lot of TV programmes on about this lately ie Watchdog, Trevor Mcdonald where the company buying your home are not keeping up the mortgage repayments so in the end you get evicted because the house is repossessed by the mortgage lender.

If you enter one of the schemes and end up being made bankrupt at some point, you could actually have committed a criminal offence.

Hi
Just to add to hg's point,you would be seen to have sold an assett at below market value,however I wonder how the OR would deal with this because I guess that not everybody would now that this is wrong and you may not know that you are going to be bankrupt at some point afterwards.
Regards

Andy Davie
IVA.co.uk Spokesperson

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I think this whole issue gets into massively messy territory.

You would have to show that the transaction was entered into for honest and excusable reasons.

The only reason I can think of for entering into the transaction is to stop creditors getting their hands on the house when you are unable to pay your debts.

Stopping creditors from getting their hands on things they would otherwise be entitled to at a time when you can't pay your debts is generally not regarded well.