Calls made for stronger regulation of sell and rent back schemes
10 July 2008
Calls have been made by financial services provider Fool.co.uk for stronger regulation regarding sell and rent back property schemes.
The company made its demands after learning that 20 per cent of homeowners are concerned that they will not be able to pay their mortgages over the coming 12 months.
In news that may interest those wishing to compare popular mortgages, the firm also discovered that a further 50 per cent of people would consider such a scheme if they faced repossession.
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Fool.co.uk notes that there are a number of myths behind the plans, such as 26 per cent of people believing that they can stay in their home for as long as they like, when the lease back to the customer is usually on an assured shorthold tenancy (AST).
Many ASTs last just six to 12 months.
Fool.co.uk also notes that 15 per cent of people believe they are entitled to the full market value of their home, when the purchase is usually at a "vastly discounted" rate, with consumers typically losing 15 - 20 per cent of their property's worth.
Meanwhile, Paul Holmes, operations director at Firstrung, recently suggested that any correction in property prices is a good thing for the house market.
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