Sale and rent back

24 July 2008

The OFT would like to hear from people who have either sold their house through the sale and rent back sector or thought about selling and then decided not to for whatever reason.

You can either call 020 7375 3577 or email info@carolgoldstoneassociates.co.uk
Responses are requested by Friday 1 August.

14 May 2008

The OFT has announced the launch of a market study looking at sale and rent back arrangements.

Sale and rent back (also known as sale and lease back) arrangements involve individual homeowners selling their property at a discount in return for the option to remain in the home as a tenant. These arrangements may be taken up by consumers in financial difficulty facing possible repossession of their homes.

Sale and rent back is a relatively new market which appears to be growing quickly. There is little detailed information about the size of the sale and rent back market at present, but going forward if the number of repossessions increases, it is possible that take up of sale and rent back arrangements will also increase. Given the current economic climate, the OFT considers it is timely to launch this important market study now.

The OFT will take a detailed look at the characteristics of the sale and rent back product and the circumstances in which these products are sold. The OFT also intends to collect further evidence on homeowners' experience of sale and rent back arrangements and consider whether it is likely that homeowners entering into such arrangements are making informed choices.

If the OFT concludes that existing consumer protection is not sufficient in this area, it will consider whether further action is appropriate, including recommending that consumer protection should be strengthened in this area.

This market study is designed to be a short study focused tightly on the sale and rent back product. The OFT will publish the report of its findings on completion of the market study. This is currently expected to be in September this year. However, we will monitor the market closely and may accelerate the work if these practices appear likely to give rise to significant consumer detriment in the short term.

Possible outcomes of a market study include: giving the market a clean bill of health, publishing information to help consumers, encouraging firms to take voluntary action, encouraging a consumer code of practice, making recommendations to the Government or sector regulators, investigation and enforcement action against companies suspected of breaching consumer or competition law, or a market investigation reference to the Competition Commission.

The OFT will be contacting key parties directly. Other interested parties can submit written views, preferably before the 14 June 2008, to:

Sale and rent back study
Office of Fair Trading
Fleetbank House
2-6 Salisbury Square
London EC4Y 8JX

Email: saleandrentback@oft.gsi.gov.uk

The OFT is unable to provide advice or resolve individual complaints for consumers. Consumers who are concerned about whether sale and rent back is the right product for them should seek independent advice. They may wish to contact an organisation such as their local Citizens Advice Bureau. Consumers who are concerned that they have been unfairly treated by a company offering sale and rent back can contact Consumer Direct (telephone 08454 04 05 06 or visit the Consumer Direct website).

However, the OFT is keen to receive information concerning complaints about sale and rent back companies and, where we receive sufficient evidence, will consider the appropriate action to take.

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