Safe Home Income Plans (Ship) has advised consumers to be aware of the differences between sale and rent back schemes and equity release plans when attempting to raise finance on their homes.
The organisation warned that while those who opt for equity release are usually protected by Ship and the Financial Services Authority, the sale and rent back sector is not regulated.
In addition, most equity release products give people the right to stay in their own homes for life, whereas short-term leases are commonly offered by sale and rent back companies.
There is no guarantee that people can stay in their homes over the long-term under such plans, the body claimed.
Director general Andrea Rozario remarked: “While 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.”
Recently, the National Landlords Association invited members to submit their views on a sale and rent back code of practice.
By Jamie Price