Companies offering sale and rent schemes have been accused of being predators, preying on elderly and vulnerable people struggling to cope with interest rate rises, according to Home & Capital.
Sale and rent products allow homeowners to sell their home to a company, which then rents it back to the seller, but Home & Capital warn that some tenants could lose their home after initial tenancy agreements expire.
Nigel Hare-Scott, sales director at Home & Capital, says: “Companies offering Sale and Rent schemes are potentially predators preying on elderly, vulnerable people. But with interest rates soaring and more pressure on finances on the way, it’s no wonder people are turning to what appears at first glance to be a quick fix option.”
Currently, sale and rent schemes are not regulated by the FSA whereas equity release schemes, which also allow elderly people to access the equity in their homes, are fully regulated by the FSA.
Hare-Scott adds: “Sale & Rent may seem attractive to those weighed down by debt and mortgage repayments, but with no regulator to oversee their activities; there is now a new type of landlord trying to take advantage of customers’ circumstances.
“Without regulation there isn’t even a guarantee the valuation will be performed independently or fairly - so people often receive less than 80 percent of the true market value for their home.”
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