Legal Protection News

It is expected that the OFT will demand greater legal protection for those who choose to sell their homes and then rent them from the new buyer.

As the credit crunch put more homeowners under pressure – many rogue operators offered to buy homes at a massive discount, charge large valuation fees and provide few long-term guarantees that people could remain in their homes.

Ahead of the OFT decision, the National Landlords Association (NLA) launched a voluntary code of practice – following consultation with the mortgage and housing industries and charities.

David Salusbury, NLA chairman, said he was committed to removing cowboys from the entire private-rented sector.

"Sale and rent back is not appropriate in all situations. However, for some families who can no longer afford the costs of home ownership, ethical sale and rent back should certainly be explored," he said."We are under no illusions that some property investors have seen the chance to make a quick buck. However, we firmly believe gambling with people’s homes is unacceptable.

"Changes to the sale and rent back market must begin now."

SHIP (Safe Home Income Plans) – which provides a code of conduct for the equity release industry – is calling on homeowners not to be confused by between sale and rent bank and equity release.
Andrea Rozario, director general of SHIP, said: "Whilst we acknowledge that there may be some ethical sale and rent back companies, we are concerned about the number of providers who are making misleading claims in their advertising.

"We recommend that consumers always take qualified financial advice before making any financial decisions which will ensure they are aware of all of their options."

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