What our
customers say

"With recent worries, we really did appreciate the fact the sale went through so quickly and smoothly and the regular communication we received throughout."

Mr and Mrs Gower, Blackpool

"We just wanted to say again how much we are grateful for your help and advice, everyone else said our situation was hopeless but with your help, we are now able to move on with our lives. All the very best"

Mr G Graham,
Bristol

"Thank you for your help in making sure the sale went through on time. We do feel like a weight is off our shoulders."

Mr and Mrs Carver, Lancaster

House Lease Options 

 

Lease Options have been around in America and Australia for many years and are also used in Europe. Over the last few years, they are being used more and more in the UK.

A common use of a Lease Option is where a seller may not be able to sell their property because their mortgage and loans secured against the property are sufficiently high that it would leave no cash left over from the sale to pay selling and moving costs. In some cases, due to the drop in house prices between 2007 and 2009, the mortgage and loans may exceed the property value meaning a sale would not raise sufficient money to clear off debts thus rendering a sale at current values unviable. This is known as “negative equity”. There are an estimated 3 million people in the UK who can’t sell because of negative equity.

What is a Lease Option:

The basic principle of a lease option is that it enables a seller of a property to pass on their property to an investor, with an agreement that the investor takes over responsibility for payment of their mortgage, leaving the owner to move out and move on with the rest of their life.

The owner remains owner and the investor agrees to take full control and responsibility for the property and will pay the mortgage on behalf of the owner. The investor would normally look to rent out the property until such time as values have risen and the investor is able to purchase the property at a discount to market value. The mortgage company would be contacted to request consent to let the property and once approved, the owner would be entitled to apply for another home owner mortgage as and when they be in a position to do so.

The arrangement will usually be linked with an agreement that enables the investor to buy the property at a point in time in the future once property values have risen.

It is also possible to agree that the owner can also benefit from a share of any growth in the value of the house meaning that owner is still able to take some cash from the sale of their property.

Lease Options provide a genuine solution where selling at today’s value is simply not possible. When entering into any legal contract, legal advice should be obtained by both parties. We can recommend Solicitors who have been dealing with Lease Options for many years and can on a sellers behalf.