Campaign over sale and rent back schemes increases
Over recent months sale and rent back scheme have been hitting the headlines on a regular basis, and have not been viewed in a good light by many officials and campaigners.
With more and more people facing repossession in the UK due to higher interest rates and repayments these firms have crawled out of the woodwork offering these vulnerable consumers a chance to stay in their homes and eliminate the risk of repossession. This is through selling their home to the company and then renting it back from them.
However, campaigners state that these firms are paying way below market value on the properties, with some sellers receiving just 60% of the actual value of the property. Then there is no guarantee with regards to how long the former homeowner will be able to stay in the property beyond the first six or twelve month tenancy. Campaigners and groups are now urging the government to act on this problem to stop any more consumers suffering at the hands of sale and rent back companies.
The Citizen's Advice Bureau recently expressed concerns to Trevor McDonald on his 'Tonight' programme, describing sale and rent back scheme as a 'disaster waiting to happen'. The CAB has been joined by the homeless charity, Shelter, and the Council of Mortgage Lenders, and together the groups hope to persuade the government to bring these sale and rent back firms under the umbrella of the UK's financial regulator, the Financial Services Authority.
One official from Shelter stated: 'The actions of some companies offering 'sale-and-lease back' schemes amounts to daylight robbery, leaving growing numbers of people financially ruined and homeless. The Government must urgently introduce regulation to stamp out this unscrupulous practice, which is cashing in on people's financial problems and deepening their misery.'
15th November 2007