New regulations provide 'greater protection for homeowners'

Posted: 02 Feb 2010 10:26:15 GMT

New rules from the Financial Services Authority (FSA), hoped to protect vulnerable homeowners in the sale and rent back market, have been welcomed by a debt expert.

Kevin Still, director of debt solution company EuroDebt, says that the proposals will provide greater protection for mortgagees.

However, he adds: "Sale and rent back can be a viable alternative for homeowners facing re-possession and struggling with other debt problems."

The guidance outlined by the FSA bans exploitative advertising and high-pressure sales techniques and introduces a 14-day cooling off period in order to give mortgagees more time to make an informed decision.

Additionally, homeowners will receive a secure minimum tenancy of five years.

Recent research from housing charity Shelter revealed that more than one million British people have used credit cards to pay their mortgage or rent in the past 12 months.

The highest proportion that paid using this method were from working class professions.

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