Skip to navigation Skip to content Skip to footer

Sale and rent back schemes run by private firms

This advice applies to Scotland

What is a sale and rent back scheme

If you're struggling to pay your mortgage, one option you could think about is a sale and rent back scheme run by a private firm. These schemes are also referred to as buy back or sale and lease back schemes.

A sale and rent back scheme run by a private firm allows you to sell your home, typically at a reduced price, and then rent it back from the firm as a tenant. A private firm can include a company, a broker or an individual.

These schemes are different from mortgage rescue schemes run by social landlords or the Scottish government

Risks with sale and rent back schemes

There are risks with sale and rent back schemes run by private firms, so it’s best to consider them only as a last resort. You need to understand exactly what you could be signing up to and how a scheme could affect your housing and financial situation in the long term.

The Financial Conduct Authority has found serious problems with private sale and rent back firms. As a result, almost all of these firms have now stopped offering sale and rent back schemes. 

If you're struggling to pay your mortgage, check if there’s another way to pay your mortgage debts and stay in your home

Get advice

If you’re thinking about signing up to a sale and rent back scheme with a private firm, you should get advice from a Citizens Advice Bureau.

You might want to think about getting independent financial advice. This will help make sure you've thought carefully about how signing up to a sale and rent back scheme will affect your financial and housing situation in the long term.

You should make sure you understand what type of tenancy agreement you have. It’s likely you have a private tenancy. Read more about types of private tenancy.

How sale and rent back schemes are regulated

The Financial Conduct Authority (FCA) regulates sale and rent back schemes. The FCA monitors how private firms provide and sell these schemes, and ensures that the firms meet certain standards. You’ll have access to a complaints procedure if things go wrong.

You can check if a firm is regulated on the Financial Conduct Authority website.

Rules sale and rent back firms have to follow

Sale and rent back firms have to follow strict rules designed to give you better protection. The rules that firms must follow include:

  • not dropping promotional leaflets through your letterbox
  • checking that you can afford to make an agreement with them and how that might affect your entitlement to benefits
  • giving you a fixed-term tenancy of at least 5 years
  • arranging an independent valuation of your home if you haven’t already got one
  • giving you a cooling-off period of 14 days to give you more time to decide what to do.

There’s more information about sale and rent back schemes on the Money Advice Service website.

Things to look out for with sale and rent back schemes

There are risks with these schemes, so you should consider them only as a last resort. 

A sale and rent back scheme might be the right option for you, as long as you check the terms and conditions of the scheme very carefully. You need to understand exactly what you’re signing up to and how it will affect your housing and financial situation in the long term.

If a sale and rent back scheme appears to be your only option, take extra care before signing up to a scheme because:

  • they usually buy homes below the market rate
  • the type of tenancy offered might give you little protection from eviction when the fixed term ends - this means your landlord might be able to evict you quite easily
  • you could still be evicted if you breach the terms of your tenancy agreement - for example, if you fall badly behind with the rent payments
  • if your new landlord gets into financial difficulties, your home could still be repossessed and you could be evicted.

If you’re currently getting benefits

If you’re getting benefits, you should check if signing up to a sale and rent back scheme will affect your entitlement. For example, it might affect your Housing Benefit or the Universal Credit housing element.

Did this advice help?
Why wasn't this advice helpful?

Please tell us more about why our advice didn't help.

Did this advice help?

Thank you, your feedback has been submitted.