WIREDGOV

Cabinet Secretary for Health and Wellbeing, Nicola Sturgeon has urged UK Ministers to do more to protect Scottish homeowners from sale and rent back schemes operated by private landlords.

Ms Sturgeon has written to Gareth Thomas, Minister for Trade, Investment & Consumer Affairs, calling for help for those in financial difficulty from the mis-selling of such schemes.

Sale and rent back is a property transaction whereby the owner gives up a significant amount of equity in return for staying in their home as a tenant.

A recent Office of Fair Trading (OFT) report questioned whether many consumers would be aware of the full costs and risks associated with such transactions.

The OFT has recommended that sale and rent back schemes be subject to statutory regulation by the Financial Services Authority (FSA).

The OFT has estimated that there are upwards of 1,000 firms, together with an unknown number of non-professional landlords, who have conducted about 50,000 transactions across the UK to date.

Ms Sturgeon said:

"I have written to Gareth Thomas expressing our support for the OFT's recommendations on sale and rent back.

"I am deeply concerned that Scottish homeowners may be exploited by unscrupulous operators taking advantage of weak legislation.

"It is imperative, given the state of the housing market, that the UK Government takes speedy action to regulate the sale and rent back market and provide real protection to homewoners.

"The Scottish Government is already doing everything in its power to help home owners in difficulty because of the global credit crunch.

"By contrast, the UK Government is dithering and rather than continuing to sit on their hands, they must move quickly and act on the OFT recommendations, which will help vulnerable Scottish homeowners."

Related Information

http://www.oft.gov.uk/news/press/2008/118-08

http://www.berr.gov.uk/whatwedo/businesslaw/competition/market-studies/sale-rent/index.html