The National Association of Sale and Rent Back (NASARB) has welcomed the Budget announcement that the industry is to be investigated by the Office of Fair Trading.
NASARB, formed last year to combat the negative image of the industry, is also planning to publish a draft code of practice next month, in order to protect consumers.
John Socha, NASARB Committee chairman, says: "We are pleased that the OFT is going to be looking into the practices of sale and rent back providers, the majority of whom provide owner-occupiers with their only opportunity to stay in their home as an alternative to imminent repossession.
“Regrettably some providers have been targeting and abusing unwary and vulnerable consumers.”
NASARB’s code of practice aims to make transactions transparent, ensure vendors receive legal advice and to give consumers some form of redress against providers who break the code.
The National Landlords Association (NLA) has been discussing the code of practice with the OFT on behalf of NASARB.
"If the draft code of practice is satisfactory to the OFT,” explains Socha, “then there will be no reason why the good, smaller sale and rent back operator should be squeezed out of the market by the larger property investors in a similar way to what has happened in the equity release market.”
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