Can I Sell My House to the Council and Rent it Back?

The idea of selling your house to the council and renting it back can be an attractive option for homeowners facing financial difficulties or those who want to remain in their homes without the burden of ownership. This guide will explore the intricacies of this arrangement in the UK, providing a thorough understanding of how it works, the benefits and drawbacks, and the steps involved in the process.

Understanding the Concept

What is a Sell and Rent Back Scheme?

A sell and rent back scheme involves selling your property to a third party—typically a housing association, private company, or in rare cases, the local council—and then renting it back as a tenant. This allows the homeowner to release equity from their property while continuing to live in it.

Legal Framework

The sell and rent back market is regulated by the Financial Conduct Authority (FCA). Since 2009, firms offering these schemes must be authorized by the FCA to protect consumers from unfair practices.

Selling to the Council: Feasibility and Process

Is it Possible?

Selling directly to the council and renting back is not commonly available as a standardized option. However, under certain circumstances, local councils may consider such arrangements, particularly for social housing purposes or to prevent homelessness.

Steps Involved

  1. Initial Inquiry: Contact your local council’s housing department to inquire about the possibility of a sell and rent back scheme.
  2. Assessment: The council will assess your situation, including financial circumstances, reasons for selling, and housing needs.
  3. Property Valuation: If the council is interested, they will conduct an independent valuation of your property to determine a fair market price.
  4. Offer and Negotiation: You will receive an offer from the council. It is crucial to negotiate terms, including the sale price and rental conditions.
  5. Legal and Financial Advice: Seek independent legal and financial advice to understand the implications of the arrangement.
  6. Completion of Sale: If you accept the offer, the sale process will be completed, and you will enter into a tenancy agreement with the council.

Financial Considerations

Sale Price

The sale price offered by the council may be lower than the market value, as councils aim to use their funds efficiently for social housing.

Rent Payment

As a tenant, you will pay rent to the council. This rent should be affordable and in line with local housing allowance rates.

Equity Release

Selling your home allows you to release equity, which can be used to pay off debts, cover living expenses, or invest elsewhere.

Pros and Cons


  1. Continued Residence: You can remain in your home, avoiding the disruption of moving.
  2. Debt Relief: Releasing equity can help alleviate financial pressures.
  3. Stability: Renting from the council can provide long-term security compared to private landlords.


  1. Loss of Ownership: You lose ownership and potential future appreciation of the property.
  2. Potential Lower Sale Price: The sale price may be lower than the open market value.
  3. Tenancy Conditions: As a tenant, you will be subject to tenancy conditions, which may include restrictions on property modifications and subletting.

Alternatives to Selling to the Council

Housing Associations

Housing associations may offer sell and rent back schemes with similar benefits and regulations.

Private Sell and Rent Back Companies

While riskier due to potential predatory practices, some FCA-regulated private companies offer these schemes. Always ensure they are authorized by the FCA.

Equity Release Schemes

Equity release schemes, such as lifetime mortgages and home reversion plans, allow homeowners to access the equity in their property without selling outright. These options are regulated by the FCA and can be a safer alternative.

Legal and Regulatory Considerations

FCA Regulations

The FCA regulates sell and rent back schemes to ensure fair treatment of consumers. Authorized firms must adhere to strict guidelines, including:

  • Providing clear information about the terms and conditions.
  • Conducting thorough assessments of the homeowner’s financial situation.
  • Offering fair market value for the property.
  • Ensuring affordable and secure tenancy agreements.

Tenancy Rights

As a tenant, you have rights under the tenancy agreement and housing laws, including protection from unfair eviction and the right to repairs and maintenance.

Case Studies

Case Study 1: Preventing Homelessness

Mrs. Smith, a pensioner struggling with mortgage arrears, contacted her local council. The council assessed her situation and offered to buy her property at a fair price. She accepted the offer, cleared her debts, and now rents her former home from the council at an affordable rate, ensuring she can remain in her community.

Case Study 2: Financial Relief through a Housing Association

Mr. and Mrs. Brown, facing financial difficulties, sold their home to a housing association under a sell and rent back scheme. The sale allowed them to pay off their debts, and they continue to live in their home as tenants, benefiting from affordable rent and long-term security.


Selling your house to the council and renting it back can be a viable option under specific circumstances, particularly if you face financial difficulties or risk homelessness. However, this option is not commonly available and involves careful consideration of financial, legal, and practical aspects. Always seek independent advice and explore all alternatives to make an informed decision that best suits your needs and circumstances.

By understanding the processes, benefits, and potential pitfalls, you can navigate the complexities of sell and rent back schemes and find a solution that provides stability and financial relief.

This guide aims to provide a detailed understanding of selling your house to the council and renting it back in the UK, covering the key considerations and steps involved.

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