Can anyone advise on the UK Housing Alliance

[1stlifeline]

My brother is in a state where his house may be reposessed shortly. He is considering letting the UK Housing Alliance buy his home and then rent it back from them. I looked on the website but cant get much from that. It says in the ad that 'The purchase price is based on 100% of the value of your home' He is taking that to read that they will give him the full going rate for his house but to my mind it dosnt say that and Im very wary of these schemes. Has anyone any views on this please?.

[Guest ArthurP]

Hmmm, I'd guess the 'value' of the home and their '100%' promise of payment is based on what they will value it. Which I suspect would be about 60% of the actual market value.

 

It's an ambiguous statement which would roughly translate as a rip off.

[Guest ArthurP]

Tell your brother to ask his mortgage company if they will put the arrears back onto the mortgage term so he can start afresh.

 

Quite a lot will do this. Good luck to him.

[Mark_Blackpool]

People coming off fixed rate mortgages (when the base rate was as low as 3.5%) are beginning to struggle, and the base rate will almost certainly be going up at the next MPC meeting by 0.25% or perhaps 0.5%, so by the end of the year 6% is looking quite possible. So these schemes are quite widespread now.

 

Here's another example of this scheme:

Sell and rent back your house plus rent rebate

 

Clearly the providers of these schemes expect to make some money from the deal, and will also want to safeguard against negative equity (e.g. they pay you 95% of the home value, but next year it's fallen 10% in value, so they're out of pocket) so I'd expect closer to 80% market value (the site above seems to be more honest about that!)

 

The property won't realise its full potential if it is reposessed and auctioned, which, if there is any negative equity after that, will be repayable by your brother (unless he declares bankruptcy).

 

The property may well fetch more if he goes for one of these schemes, and if the property market collapses, as an increasing number of people are beginning to make noises about, then he may not do badly at all out of the deal; it may be the best couse of action unless of course, he can renegotiate the current mortgage as above which is clearly best.

 

However do read very thoroughly through the particulars, if there is time in it, selling the current property and downsizing - if that's possible - would enable him to remain an owner occupier. Check very carefully that the tenancy is indeed secured and he isn't going for the sceme only to find the rent goes up 40% next year and his own home is now unaffordable to him.

[1stlifeline]

Thank you for your help people. He isnt able to renegotiate his mortgage as he is no longer working. He is quite ill at the moment and is not expected to be able to work again for at least 12 months so they wont help him.

[mariette]

Hi I phoned them a few weeks ago to see what the catch was and yes there is a catch Im afraid.

They say they do give you 100% but it is something like 70% now and the rest in 10 years.

and I suspect their valuation will be lower than expected.

[389shell]

Yes, to get the full price agreed you get an initial payment of 70% of the agreed price and the further 30% is payed once you have rented the property for 10 years! I would suggest looking into the rent charged by these companies as it may be worth your brothers while just putting his house on the market, getting market value and then getting value for money on his rent. Has he put himself on the council housing list?