Sale-and-lease-back property schemes are 'a disaster waiting to happen' according to Citizens Advice Bureau
We've got people who are vulnerable trying to stay in their home being enticed into an industry that has no controls on it at all at the moment and that is a disaster waiting to happen, says Peter Tutton, of Citizens Advice Bureau
At it's best, it offers a lifeline for people having to leave their homes because they can't keep up with mortgage re-payments.
Operators buy houses below market value and lease the back to owners, who might otherwise face repossession. Giving homeowners a quick sale and the opportunity to stay in their homes while they sort their finances out.
Sale-and-lease-back is important because thousands are facing repossession as the mortgage bills rise beyond their means. The government has mentioned it is a possible short-term solution for those facing eviction.
There are some sharp operators in the market. All too often, excessive rents, long contracts and missleading advice from unscrupulous firms can cause hard-ship.
People are being ripped off. We are seeing people who are getting only 50% or 60% of the value of their homes instead of the 70% to 90% they should be getting, says Adam Sampson of housing charity Shelter
In the current economic climate The Office of Fair Trading wants the FSA to introduce statutory regulation. Until there is proper regulation, it is a case of seller beware.Labels: property, renting, tenants
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