How to sell and then rent back your house

There are plenty of people who are looking to make some extra money using their property and in this case, it seems that sell and rent back schemes are a great way to do that. In fact, most people consider them because they want to clear debts and of course, make some extra cash. Others, though, just want to free up some equity from their house so they don’t have their money tied up in their property.

What’s great about quick sales on a sell and rent back basis is the fact that you can make some extra cash while still living in your own house. And as you may very well know, doing that without having to change jobs, move your children from one school to another and also all your belongings, is a real blessing.

If I rent my house after selling it, can I still receive Housing Benefits if I cannot pay the rent?

There are two scenarios where you won’t be entitled to housing benefits:

  1. You rent the property you once owned.
  2. You claim Housing Benefit within 5 years after selling that property.

In fact, this rule is known as the former owner rule and doesn’t apply if you can prove that you haven’t continued living in your property without selling it. Keep in mind that after 5 years though, the former owner rule doesn’t apply anymore. On the other hand, when the 5 years have passed, there are other factors to be considered before it can be decided whether you’re still entitled to Housing Benefits or not.

Selling your house and proving your need to do that to the Housing Executive

If you have to sell your house, then you need to have solid proof that you were forced by various circumstances to do that. Evidence can include:

  1. Proof of outgoings and income when you took the decision to sell the house.
  2. Letters from your mortgage lender concerning the action they’d take to collect outstanding debts.
  3. Evidence of other factors that forced you to take this decision.

Get the key facts

When you decide to sell and then rent back your property, the company (which needs to be FCA regulated) that’s going to help you out with it needs to give you a Key Facts Illustration that shows you essential info about the scheme. This includes:

  1. Consequences of you falling behind with your rent.
  2. Situations when the rent can be increased.
  3. The rent payable under the agreement.
  4. An valuation of your property’s market value determined by an independent valuer.
  5. The amount the company plans on paying for the property.
  6. Your tenancy agreement’s fixed term (it needs to be minimum 5 years).

It’s important to keep in mind that after you’ll get a written offer concerning the purchase of your property, you have fourteen days to consider it before the company can reinitiate contact with you.

Related: What is a sale and rent back scheme?

Check the scheme carefully

It’s very important that you take your time to review the scheme in order to see if it affects your right to state benefits in any way. For more information about this, you may want to get in touch with the welfare benefits office at your local Citizens Advice or council.

Don’t forget to read the tenancy’s terms carefully and bear in mind that you need to be offered a fixed term tenancy of at least 5 years. There are also quite a few things you need to consider in order to avoid being evicted, so be sure to get advice on that as well.

If things go wrong

If you do wish to deal with a company that’s regulated, you need to make sure they have complaints procedures in place. When something goes wrong, you need to first of all complain to the company and if the outcome is not up to your satisfaction, then it’s recommended to take your claim to the Financial Ombudsman Service. This is a free service. On the other hand, if you wish to file a complaint about the way you were treated as a tenant, you should get in touch with the local Citizens Advice or Shelter to get advice on your rights.

By keeping these tips in mind, selling and renting back your house is definitely going to be a great, hassle free and safe experience for you.