Lease option contracts may lead to repossessions

Tue, 18 Oct 2011

Homeowners who agree to lease option contracts could face house repossession, a study warns.

BBC 5 Live Investigations has looked into the rise in repossessions that is expected to occur in the near future, partly due to many people opting for this agreement.

It cited the example of Martin Angliss, who wished to move out of his old home and into a larger abode.

Unable to find a buyer, Mr Angliss signed up to a residential lease option contract whereby the company promised to pay his mortgage and maintain the property while it was being rented out to new tenants.

But the homeowner became suspicious when he began to receive warnings that his credit limit was being lowered and eventually discovered the firm had missed three mortgage payments, meaning repossession proceedings are now set to occur.

Property expert and TV presenter Kirstie Allsopp - known for fronting Chanel 4's Location Location Location with Phil Spencer - says: "The idea of handing the communication with your mortgage company over to someone else who's paying your mortgage for you seems deeply suspicious from the outset."

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