Paradigm Mortgage Services has partnered with sale-and-rent back firm Residential Property Solutions Limited.
Paradigm members can now introduce clients to RPS who are facing financial difficulties or possible eviction and have exhausted every other option available to them.
If clients decide rent-back is for them, RPS buy the property at an agreed discounted price below market value and agree an affordable market rent to enable clients to remain as tenants.
Clients are able to buy back their property later, provided they have met all the terms of their rental agreement, and they may be able to share in any increase in market value.
The rent-back scheme include the ability to buy property for cash up to 75% of open market value, and provides Assured Shorthold Tenancy agreements for between two and five years.
RPS pays for all valuation and legal fees.
John Coffield, head of Paradigm Mortgage Services, says: “We are first to acknowledge that rent-back products will not be right for everyone, and should only be considered when all other avenues have been pursued.
“But Paradigm members will have certain clients who are on the brink of eviction and have no other option available.
“In this situation, we believe the only option is to introduce them to a reputable and ethical sale and rent back company to ensure complete transparency in accordance with the FSA’s regulation of the sector.”
Pete Thomson, sales director of RPS, says: “We’re delighted to have teamed up with Paradigm so that their members can introduce clients to us.
“The Council of Mortgage Lenders is forecasting that the number of repossessions will continue to rise in 2010 and despite various government initiatives and lender forbearance, there will still be thousands of home owners who will be able to benefit from an rent-back scheme.”
At the moment rent-back is subject to interim regulation by the Financial Services Authority, with full regulation due to come in with effect from June 30.