Sale and rent back 'increasing dramatically'

Buy letting agent software that works

Homeowners have been warned about the potential dangers involved with sale and rent back schemes, after it was revealed that the number of people taking such deals has risen steeply in the last few months.

The Homeowners Advice Centre said that interest in the sale and rent back sector of the housing market had increased as people are finding it more difficult to repay their mortgages, but said it wasn't likely to become a widespread phenomenon.

AL Elliot, a spokesperson from the organisation, which issues free advice to homeowners, welcomed a pending OFT investigation into the practice, warning that most companies advertising such schemes are individual landlords looking for cheap deals who cannot offer long-term security.

"This area desperately needs regulating, and I suspect that most of the smaller providers would close down or stop advertising if the OFT ensured that the lease was a minimum of 20 years and they had to have £1million in equity or liquidable assets before trading," he added.

The OFT is planning to investigate the sector, as it becomes more popular among homeowners who are unable to refinance their homes and face the danger of repossession.

Find out more about Marketing with letting agent software