Thursday, Jul 09, 2009
Bye bye parasites Hello reposessions.
The Times: Landmark ruling on sale-and-rent-back schemes
A family who were about to lose their home to a sale-and-rent-back scheme have won a landmark ruling that will allow them to stay in the property for life.
Posted by cheekie charlie @ 09:51 PM (451 views) Add Comment
2 Comments
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1. symo said...
Another blow to the housing market, these firms propogated the idea that homes had values. Now they can't be assured of profit on the rent then it is another nail.
2. uncle tom said...
All the comments under this piece are by people who don't seem to understand the story.
If you let a property without a written tenancy agreement, it is very hard to make the tenant leave or raise the rent. This case clarifies (to a degree) what should happen when a landlord goes bust and the landlord's mortgage lender steps in. The tenant had an arrangement with the landlord, but not his mortgage provider.
It raises significant issues and complications for BTL lending. It is hard to see how, in practice, a lender could ensure that tenancy agreements were correctly worded to cover their interest.
I suspect that BTL lenders will feel the need to calculate and price this risk, and raise their rates to cover it; further spoiling the economics of BTL