Rent back schemes work by the rent back company purchasing the home, normally at a discounted price, and renting it back to the owners after the sale of the property. "This can be useful for some, not all, people who can not afford to keep their property, but would like to carry on living in it" says Tim Buch spokesman of the UK site Rent Back My Property, a website providing sell to rent back schemes in the UK, who also goes on to mention that rent back schemes are tailored to suit each individual property owner and their personal set of financial circumstances. Contracts can also be created to include the option of buying back the home after a set period of time, for a pre-negotiated price. The house is normally bought by an investor who is only looking for long term tenants.

I encourage everyone wanting to sell a house and rent back to be diligent when dealing with companies. Ask to see all tenancy documents upfront and take legal advice. Check also how the company is planning to change the rent over the next 10 years or so.

However, these schemes might not fit everyone's needs. A discounted price is often paid for a property, typically 80% - 85% of the market value. "There are many costs involved in purchasing and maintaining properties which we need to cover. Additionally, due to the long term nature of this arrangement, investors need to hedge their risks and protect themselves against future price fluctuations. Counting on the property prices continually rising is not a wise strategy." comments Buch.

"We understand the discounted price would not appeal to most people. However, there are some clients who are happy to trade off part of their equity in return for keeping their homes. They put a price on the emotional and practical elements of carrying on living in the property." adds Buch.

Additionally, no legal guarantees are given to remain in the property indefinitely. "Although it is our intention to rent back long term, we can not give a lifetime guarantee on how long tenants can remain in the property. This is mainly due to future economic factors which we do not control and can not predict" says Buch. "Our main risk comes from movement in the interest rate. Any double digits interest rates will leave everyone, including home owners, stretched significantly."

There are many property traders offering the rent back schemes. "I encourage everyone wanting to sell a house and rent back to be diligent when dealing with companies. Ask to see all tenancy documents upfront and take legal advice. Check also how the company is planning to change the rent over the next 10 years or so." says Buch.

"The house rent back scheme is definitely good news to some home owners." points out Buch. "From the testimonials we have received and shown on our website it is clear many people have found this arrangement to be an answer to their prayers."