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Sale-And-Rent-Back Housing Company Gone Bust

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Families face losing thousands as UK Housing Alliance North West collapses - LINK

Dozens of families across Greater Manchester face losing tens of thousands of pounds each after a sale-and-rent-back housing
company collapsed.
Tenants of UK Housing Alliance North West have been left devastated after the business was put into administration owing £38m to
the bank.
The M.E.N. understands the collapse leaves at least 40 Greater Manchester households facing total losses of £1.3m.
UK Housing Alliance bought the families’ homes and handed over 70 per cent of the value at the time of purchase.
The remaining 30 per cent was due to be paid to each tenant after they had rented their property back from the company for 10 years.
The families now look likely to lose cash they had banked on for retirement and for their children.

Sh!t just got real.

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That scheme had fishy written all over it. I'm assuming all those 30% amounts creamed off the top went on cigars, cocktails and sexy ladies :lol:

Too good to be true - I wonder why!

Edited by MrFlibble

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http://menmedia.co.uk/manchestereveningnews/news/s/1313241_families_face_losing_thousands_as_uk_housing_alliance_north_west_collapses

ack housing company collapsed.

Tenants of UK Housing Alliance North West have been left devastated after the business was put into administration owing £38m to the bank.

The M.E.N. understands the collapse leaves at least 40 Greater Manchester households facing total losses of £1.3m.

eh?

UK Housing Alliance bought the families’ homes and handed over 70 per cent of the value at the time of purchase.

The remaining 30 per cent was due to be paid to each tenant after they had rented their property back from the company for 10 years.

eh?

Sorry being really thick... who sold what to who?

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http://menmedia.co.uk/manchestereveningnews/news/s/1313241_families_face_losing_thousands_as_uk_housing_alliance_north_west_collapses

ack housing company collapsed.

Tenants of UK Housing Alliance North West have been left devastated after the business was put into administration owing £38m to the bank.

The M.E.N. understands the collapse leaves at least 40 Greater Manchester households facing total losses of £1.3m.

eh?

UK Housing Alliance bought the families’ homes and handed over 70 per cent of the value at the time of purchase.

The remaining 30 per cent was due to be paid to each tenant after they had rented their property back from the company for 10 years.

eh?

Sorry being really thick... who sold what to who?

Weird scheme for even weirder people who thought risking a home to grab some cash was a good gamble. Shame they rolled snake eyes, but apparently it's OK to moan about it and say "the money should have been in a protected fund"!???! - saw the interview and that was said.

The solicitor working for some of the people said she would pursue the administrators to get some or maybe all of the money back. I mean, seriously, a company goes into administration because it has no money or assets of any significant value. The poor fools don't get it but the solicitor should. But then I guess she gets some cash or publicity.

Bunch of wackos, what did they think would happen to the money eh? They would magically get protected by the pixie mortage fairy or something.

Edited by Redcellar

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I just don't understand...

So Mr Jones sells his house to company X.

Company X give him 70% of the value back and then Mr Jones rents it off company x?

After 10 years Mr Jones gets back the rest of the money from company x?

So who owns the house? "value" - does that mean the house or the money?

I've either had a stroke or my brain has melted.

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HPCers having been banging the drum about these companies for years - doomed to fail.

Same with equity release - it all falls apart when house prices fall. The risk models only work if "house prices only ever go up".

Whoops Long Term Capital Management all over again.

Edited by Money Spinner

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I just don't understand...

So Mr Jones sells his house to company X.

Company X give him 70% of the value back and then Mr Jones rents it off company x?

After 10 years Mr Jones gets back the rest of the money from company x?

So who owns the house? "value" - does that mean the house or the money?

I've either had a stroke or my brain has melted.

The company that went bust buys the houses, you get 70% and rent it. So they, the company, own the house and you get cash and rights to rent for life.

Presumably they were doing a similar thing as mortgage backed securities, in that they package up the houses, sell them as an investment, since houses only ever increase in value, and BTL people pay for them since the owner has the right to rent for life. The rent goes to the 'investors' who buy the packages. That's how I presume they intended to make money out of it. Of course they, the bakrupt company, also get to have 30% of the value of the house for ten years to play .. ahem I mean invest. Keeping any profits from that. All assumes someone else would buy a BTL packaged house thingy-me-bob from them.

Convoluted and requires repackaging and reselling the houses presumably. Doomed to failure and lo and behold ....

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Convoluted and requires repackaging and reselling the houses presumably. Doomed to failure and lo and behold ....

Well I think this is where I am confused... it sounds like a scam...

So why would people fall for it?

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Well I think this is where I am confused... it sounds like a scam...

So why would people fall for it?

Desperate? Greedy?

They see an offer of 70% cash up front. 30% more in 10 years and think I can't lose!!! I get all my money back and a really cheap rent so I never have to move.

If you bought your house in 2000 at £75K and they buy it today at £125 then you think, wohooo £50K! in my pocket and I don't have to leave the place. Money for nothing they think and so they grab it.

Desperate and sadly lack of education made them make a poor choice.

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Desperate? Greedy?

Desperate and sadly lack of education made them make a poor choice.

And the lack of iron in toddlers diets mean we're breeding them stupid too.

(... it was a thread in off topic earlier)

:)

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And the lack of iron in toddlers diets mean we're breeding them stupid too.

(... it was a thread in off topic earlier)

:)

The side effect of a lack of iron in a toddlers diet is you can't use a compass to find them when you have let the scally's out to play with the neighbours cars until midnight.

Breeding them stupid is probably a good idea, at least they will not suffer, or know they are suffering.

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Desperate? Greedy?

They see an offer of 70% cash up front. 30% more in 10 years and think I can't lose!!! I get all my money back and a really cheap rent so I never have to move.

If you bought your house in 2000 at £75K and they buy it today at £125 then you think, wohooo £50K! in my pocket and I don't have to leave the place. Money for nothing they think and so they grab it.

I imagine most of these people were under severe financial stress, probably of their own making, So, faced with the choice of repossession or this, well, it must have looked like a no-brainer. Even to no-brainers.

I'm sure the "sale" price was WELL below market value though.

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You're probably right I call them "skimmers". Skimmed off the top a fat profit and now safely in Barbados.

Edited by Money Spinner

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Desperate? Greedy?

They see an offer of 70% cash up front. 30% more in 10 years and think I can't lose!!! I get all my money back and a really cheap rent so I never have to move.

If you bought your house in 2000 at £75K and they buy it today at £125 then you think, wohooo £50K! in my pocket and I don't have to leave the place. Money for nothing they think and so they grab it.

Desperate and sadly lack of education made them make a poor choice.

Mind you if the price had fallen 25% they would be even whatshisname wouldn't they? Wonder who owns it now? Velly interesting (but stupid).

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You're probably right I call them "skimmers". Skimmed off the top a fat profit and now safely in Barbados.

Hey there's such a thing as running expenses in a company. Running a Roller, running an expense account so on. Don't be so judgmental.

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Hey there's such a thing as running expenses in a company. Running a Roller, running an expense account so on. Don't be so judgmental.

You forgot the important one ... running off.

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I've been searching for actual numbers to see how these skeezers were operating. No luck, but did find a couple of interesting snippets:

"Law firm Berg Legal is representing more than
150 of the 375 tenant creditors
affected by the collapse of Didsbury-based property firm UK Housing Alliance.
UK Housing Alliance acquired property from homeowners and then rented it back to them. Sellers would receive 70% of the value of the sale, with the remaining 30% to be released as a lump sum following ten years' leaseback,
provided that they paid top market rent for the full ten-year period.
UK Housing Alliance, however, entered administration with outstanding debts to its secured lender, Kaupthing Singer & Friedlander, which itself collapsed in the aftermath of the Icelandic banking crisis.
The administration means that tenants who sold their properties could be left millions of pounds out of pocket, with the
tenants represented by Berg Legal alone collectively owed around £5m.
"

That makes the 30% share worth about £33,333. 70% share around £78,000. I wonder how that stacks up against market value.

http://www.mablaw.com/2010/03/sale-and-leaseback-of-property/' rel="external nofollow">
"Mr Francis sold his property to UK Housing Alliance, who then rented it to him on an assured shorthold basis. The sale price was payable as to 70% on completion and 30%
on expiry of 10 years and the giving up of possession
by Mr Francis. If, however, Mr Francis terminated his tenancy at any time during the first 6 years, the final payment would not become payable. Mr Francis fell behind with the rent and UK Housing Alliance sought possession of the property. Despite the terms of the agreement, Mr Francis asserted that UK Housing Alliance should still make the final payment."

... :blink: ...

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Interesting. This is not the first "UK Housing Alliance" to go bust. Google finds:

The London Gazette, 21 January 2009

Uk housing alliance management llp

Corporate Insolvency

(Company Number OC324067) Notice is hereby given that Lane Bednash, of Valentine & Co, 4 Dancastle Court, 14 Arcadia Avenue, London N3 2HS, was appointed Liquidator of the above-named Company on 13 January 2009. Creditors of the Company are required, on or before 30 April 2009, to send in their names and addresses, particulars of their debts or claims, and the names and addresses of their Solicitors (if any) to the Liquidator of the said Company.

Read more: http://vlex.co.uk/vid/uk-housing-alliance-management-llp-52051623#ixzz0vmbQ0PDg

Anyone with time on your hands (or any law students or ...) might delve a bit deeper: check companies house records and the like.

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Be interesting to see what the government stance is on these schemes – will they bail them out (so much for helping the business side economy if they do!)

As for saying the money should be in a protected fund! This attitude is fkin ridiculous – I’d like to place a bet on red but on the condition that all colours are red!!!!

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Desperate? Greedy?

They see an offer of 70% cash up front. 30% more in 10 years and think I can't lose!!! I get all my money back and a really cheap rent so I never have to move.

If you bought your house in 2000 at £75K and they buy it today at £125 then you think, wohooo £50K! in my pocket and I don't have to leave the place. Money for nothing they think and so they grab it.

Desperate and sadly lack of education made them make a poor choice.

It should be a free house for the company. They get a 70% LTV mortgage and pass the proceeds on to the seller. After 10 years, they re-mortgage the property at the assumed higher value and give the remaining 30% to the seller who has been paying more in rent than the mortgage.

This is the ultimate BTL based ponzi scheme where the buyer doesn't have to put any of their own capital into the business.

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I just don't understand...

So Mr Jones sells his house to company X.

Company X give him 70% of the value back and then Mr Jones rents it off company x?

After 10 years Mr Jones gets back the rest of the money from company x?

So who owns the house? "value" - does that mean the house or the money?

I've either had a stroke or my brain has melted.

sobvious innit

its a remortgage.....they mortgage the house for 100% and pay rent for the next 10 years, when they get 30% of the remo back.

trouble is, the remortgage used was to cover a mortgage from the scammer with a bank, who didnt expect to hand back 30% at the end.

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