Sale and rent back proposals welcomed

Potential regulation of the sale and rent back (SRB) sector has been welcomed.

Al Elliot, co-owner of the Homeowners Advice Centre, stated that it could help to protect those who choose to sell their property at a discount in exchange for remaining as a tenant.

Earlier this week, the Financial Services Authority published a consultation paper as part of steps towards improving the experience of consumers by introducing regulation.

And Mr Elliot remarked: "Hopefully there will be a specific and specialised group of mortgage products developed for companies aiming to offer SRB, which will allow borrowers to extend long-term tenancies."

He also suggested that a standard form be produced, advising homeowners that there are other options available to them.

Last year an Office for Fair Trading report found that some consumers had been misled into thinking their security as tenants was greater than it was, with some examples of eviction after short periods.