With the economy still being unstable and many households struggling to make ends meet many are considering abandoning their properties by taking sale and rent back agreements. However this may not be the most suitable option.

Sale and rent back agreements may work out in some cases but homeowners considering this option have to take into account two factors. The first of these is that you are not offered the full asking price for the property and the second is the rental agreement terms. Typically homeowners are only paid around 60% to 70% of the value of the property and the rental agreement is usually 5 years. After this period of time there is no guarantee they are able to remain in the property.

Any homeowner who is struggling to meet their mortgage repayments may wish to consider other options before rushing in to a sale and rent back agreement. For instance as soon as problems arise it is importnant to contact the lender, as they may be able to help. Another options to consider is to re-mortgage the property for a mortgage with a lower rate of interest. If you do want to take the sale and rent back agreement option, ensure that you sell with a company that is registered and backed by the Financial Services Authority.