30
May
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.
