Mortgage rescue scrutiny
15 May 2008
Shelter has welcomed the news that The Office of Fair Trading (OFT) has launched a market study into the fast-growing sale and rent back sector.
Sale and rent back arrangements (also known as 'sale and leaseback', or mortgage rescue schemes) involve homeowners selling their property at a discount in return for the option to remain in the house as a tenant. The review will consider whether consumers are being suffficiently informed and protected.
Adam Sampson, chief executive of Shelter, said:
'This study is urgently needed, and comes on the back of vulnerable people losing their homes to some dishonest sale and leaseback companies.
'These companies encourage hard-up homeowners to sign up for what is plainly a very bad deal. Shelter has seen cases where homeowners have not only lost out financially after selling their homes to a sale and leaseback company, but also lack any right to permanently stay in their home and ultimately find themselves homeless.
'Shelter has called on the Government for regulation in this growing sector, and we hope the OFT study will offer the public improved protection against the hidden dangers of some schemes and ensure all sale and leaseback companies operate in best interests of consumers.'
