New regulation that is set to be brought in for companies that offer sale and rent-back schemes has been welcomed by Citizens Advice.
The charity said that it has seen several cases in which people signed up to the schemes – possibly in an attempt to clear debt – but have ended up losing money and being made homeless.
Social policy officer Peter Tutton stated that Citizens Advice is “relieved” that the Financial Services Authority (FSA) is to oversee the sale and rent-back industry.
More regulation is needed, he argued, as people are increasingly “struggling with mortgage arrears, facing the threat of repossession and may be attracted by what appears to be a solution”.
He added that the new rules may help to stop “cowboys” from operating in the sector.
HM Treasury announced this week that the FSA’s powers will be extended so that it can tackle problems in the sale and lease-back market.
By Jamie Price