Like many cash-strapped West Midland families, desperate Michael Stokes sold his house to a private finance company for just two-thirds of its market value in order to get some quick cash and then rent his property back.

But his rental agreement expires at the end of next month – after which he risks being thrown out at two months’ notice. The “sale and rent back” scheme is legal but today prompted a warning from experts that  people should think twice before getting involved.

Mr Stokes, a 61-year-old widower from Low Hill, Wolverhampton, signed up to one of the deals amid fears he was going to lose his house after being threatened with eviction over mortgage arrears.

He had fallen badly behind on the payments when unable to work following the sudden death of his wife Nora. The arrangement seemed the perfect solution to his cash problems.

He agreed to accept £45,000 for his home, despite it being valued by experts at £70,000. He was also only guaranteed permission to stay for a year. 

He said today: “It was like somebody throwing me a lifebelt when I was drowning. I was losing my house and had lost my wife. I thought  some money was better than none.”

Mr Stokes sold the house and signed a 12-month rental agreement last November under the mistaken belief that he could stay for the rest of his life. He also spent a chunk of the cash on his wife’s funeral.

He has now received a Section 21 “no fault” notice that gives the new owner the right to go to court to get a possession order at any time after the expiry of the rental agreement. 

Another Wolverhampton couple sold their house at almost £60,000 below market value for a quick rent-back deal but then defaulted on the arrangement by missing two rental payments. They were evicted. 

The couple asked not to be identified but a friend said: “They would have done far better if they had sold the house normally. It was a lose-lose situation.”