30 May

Sale and rent back sector 'in need of regulation'

Sale and rent back sector 'in need of regulation'

The sale and rent back sector of the property market is in desperate need of regulation, according to a spokesperson for the Homeowners Advice Centre.

Ahead of the Office of Fair Trading's (OFT) upcoming investigation into the practice, Al Elliot noted that the trend has become much more commonplace in recent months.

However, he predicted that it would never become as widespread as other equity release schemes due to the fact that the offers available vary widely.

Mr Elliot said he could not see a time where sale and rent-back would be preferable to re-financing, provided the remortgage route is available.

He predicted that "most of the smaller providers would close down or stop advertising if the OFT ensured that the lease was a minimum of 20 years and they had to have £1 million in equity or liquidable assets before trading".

Sale and rent back arrangements involve individual homeowners selling their property at a discount, in return for the option to remain in their home as a tenant.

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