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OFT launches study into sales and rent back
15 May, 2008
The OFT is to take a detailed look at the sale and rent back sector and, bearing in mind the circumstances in which these products are sold, consider whether existing consumer protection legislation is sufficient and effective.
Sale and rent back (also known as 'sale and lease back') arrangements involve individual homeowners selling their property at a discount in return for the option to remain in the house as a tenant. These arrangements may be taken up by consumers in financial difficulty facing possible repossession of their homes.
Sale and rent back is a relatively new sector which appears to be growing quickly. If the number of consumers potentially facing repossession increases, it is possible that the take-up of sale and rent back arrangements will also increase. Given the current economic climate, the OFT considers this important market study is timely.
The OFT aims to complete the work in September this year.
Commenting on this, John Fingleton, OFT Chief Executive, said: “Sale and rent back schemes might be helpful for some consumers but there are a number of potential concerns including whether consumers in difficult circumstances are making well informed choices. We are therefore prioritising this work to take a good look at whether consumers are adequately informed and protected.”
The OFT will be contacting key parties directly. Other interested parties can submit written views to:
Sale and rent back study
Office of Fair Trading
Fleetbank House
2-6 Salisbury Square
London EC4Y 8JX