Sold out

But in the wake of the credit crunch and the housing market downturn a depressing new trend is emerging. Homeowners who staved off repossession by selling to a sale and rent back company are facing eviction because the company itself collapsed under the weight of debt on mortgages it used to fund the buy-outs.

Shelter is advising Paul and Amanda Jackson, who are being threatened with eviction from the three-bedroom house in Shrewsbury they have occupied since 1984.

The Jacksons are among a number of families who fell victim to Repossessions Stopped Ltd, the company that offered to buy their house when they got into difficulties with mortgage payments and promised to let them stay on as tenants after the sale.

But the Birmingham company, run by Lisa Welch and Richard Dewsbury – which at one time owned around 240 properties throughout the country – financed the deals with high-interest mortgages. When it failed to keep up payments, the mortgage lender sought possession and tenants, such as the Jacksons, found themselves facing eviction after all.

Paul Jackson says: ‘We bought the house in 1984 and our three children have grown up in it. Originally, we had just one mortgage with the Leeds building society, but we took on another with the Cheltenham and Gloucester to pay for improvements.

‘The two mortgages added up to £63,000 and we had no trouble paying them at first, with both of us working. But in 2015 I wasn’t well and had to take a lower paid sales job. That was the start of our problems. We found ourselves dropping behind on mortgage payments and were robbing Peter to pay Paul. One mortgage would be paid, but we couldn’t pay the other – and next time it was the other way round.

‘In August 2015 we realised we had to change the situation, but the bank wasn’t very helpful. Then we saw Repossessions Stopped’s advert in the local paper. It seemed like the solution to our problems, and it seemed even better after one of the directors, Richard Dewsbury, came round and spoke to us. He said they’d buy the property and rent it back to us and we could stay.’

Paul Jackson says the family sought assurances that they were safe from eviction – that the company would live up to its name.

‘We were worried about the long term and asked if our daughter, who was the oldest one living with us at the time, would have somewhere to live if anything happened to us. He reassured us and said he’d put her name on the rental agreement so she’d have an interest on the place.’

Repossessions Stopped paid £63,000 for the house – the amount owing on the two outstanding mortgages. What the Jacksons didn’t know was that two directors had financed the deal with a mortgage from the sub-prime lender Beacon, which was later bought out by Redstone Mortgages.

‘Repossessions Stopped took over in October 2015,’ Paul Jackson says. ‘But the first we knew about any problems was when a letter arrived from the mortgage company at the end of 2016 saying Miss Welch was behind with the payments. We were unaware there was a mortgage.

‘When we contacted the company directors they said it was a mistake and not to fear. We didn’t worry until letters addressed to us started arriving. Last July, when an eviction order was served on us, it came as a shock. That was when we sought help from the council and were put in touch with Shelter.

‘When we found out about the mortgage, we were appalled over how much the company seems to have pocketed. They paid us £63,000, but the mortgage they took out was for almost £100,000 so they instantly gained almost £40,000.

‘If the mortgage company had done a survey that would have alerted us to the danger, but it didn’t. How did they get a mortgage without a survey?’

Shirley Hale, from Greater Manchester, ran into debt after borrowing to repair fire damage at her home. She was evicted six-months after selling to Reposessions Stopped, the company she thought would be her saviour.

Repossession Stopped is only one of the companies that seemed to offer salvation to hard-pressed homeowners – but gave guarantees that were made worthless by mounting debt.

In 60 per cent of cases unearthed in a Shelter survey of sale and rent back schemes, companies defaulted on mortgage payments and the sellers ended up being threatened with eviction orders.

Solicitor John Gallagher, of Shelter’s legal services department, says: ‘This is a prime example of the pitfalls of so-called mortgage rescue schemes.

‘Borrowers such as the Jacksons are told that they will have the right to stay in their homes for life. They enter into a sale and rent back scheme believing it is the solution to their problems, only to find themselves threatened with repossession by the landlord, or by the landlord’s lender. The sale and rent back market is in urgent need of government regulation.’

Shelter also took up the case of another homeowner who had fallen foul of the same company. Christopher Roberts, a retired civil servant in his 60s, sold his £145,000 home in Stourbridge, West Midlands, to Repossessions Stopped for £95,000 and was threatened with eviction when it collapsed.

And Shirley Hale, from Hattersley in Greater Manchester, was evicted from her £85,000 home after selling it to Repossessions Stopped. She was rehoused by the council in a one-bedroom flat.

Other families in Cheshire, Leicestershire and several on Merseyside found themselves in the same situation. When Repossessions Stopped went into receivership last year, it owed £19 million to mortgage lenders on more than 200 properties.

Redstone, which owns the Jackson property’s current mortgage, has been criticised for its pursuit of arrears. It has served an order on the Repossessions Stopped directors for repayment of the outstanding mortgage and on the Jacksons to obtain vacant possession of the property for resale.

John Gallagher argues that the Jacksons are innocent victims and should be protected. ‘When the Jacksons sold the property they were promised a life tenancy and, as far as we are concerned, that is what they are entitled to,’ he says.