Sale and leaseback schemes raise 'lots of concerns'

Posted: 15 Oct 2008 11:27:58 GMT

There are many potential issues surrounding sale and lease back schemes, the Council of Mortgage Lenders (CML) has warned.

According to the CML, "there are lots of concerns about sale and lease back" because customers can be at a disadvantage.

Bernard Clarke, a spokesperson for the organisation, said that there are problems with the quality and reliability of advice given to consumers, as well as with the way that properties are evaluated.

As such, Mr Clarke said that the CML is keen for the sector to have "comprehensive regulation".

He suggested that sale and lease back customers should be able to go through a standard process that does not cause confusion, in a similar manner to the way in which people who are struggling to pay their mortgage have to deal with lenders.

Mr Clarke explained: "Customers ... dealing with sale and lease back companies are dealing with [an] institution that is not regulated, so there is not a level playing field for institutions and that creates confusion for consumers and significant potential for consumer detriment."

Sale and rent back arrangements allow homeowners to sell their properties at a discounted price but remain in their home as a tenant.

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