Calls made for sale-and-leaseback regulation

The Council of Mortgage Lenders (CML) has joined up with Citizens Advice and Shelter to call for the regulation of sale-and-leaseback schemes so that consumers can be assured of higher standards within the sector.

The schemes, which enable homeowners in financial difficulty to sell their property to a firm for a discounted rate before renting it back, have attracted criticism from the way that homes are purchased without an independent valuation, as well as a perceived lack of security for owner-occupiers once they become tenants.

Such companies' advertising, sales and customer care standards should all be investigated by the Office of Fair Trading, the organisations have suggested.

"We have seen a number of cases where people in mortgage arrears and facing the threat of repossession have gone ahead with a so-called 'mortgage rescue' scheme on the understanding this would allow them remain in their home in the longer term, only to find themselves homeless within a year," said Citizens Advice public policy director Teresa Perchard.

"These schemes can be difficult to understand, and the information about them can be misleading," Ms Perchard added.

A financial climate characterised by higher interest rates and more restrictive lending conditions is likely to be contributing to more Britons falling foul of such schemes, it was recently suggested.


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