FSA 'should regulate sale-and-leaseback'
23rd Oct 2007
The Financial Services Authority (FSA) should regulate sale-and-leaseback schemes in order to protect consumers.
That is according to the Council of Mortgage Lenders (CML), Citizens Advice and Shelter, which point out that the schemes, which allow owner-occupiers to sell their homes and remain there by leasing it back, offer little tenure security.
Further, properties are often bought at a cut-price rate without an independent valuation, and target people at what could be a difficult time for them if they are facing repossession.
The groups also believe that the advertising and sales of these products should be investigated by the Office of Fair Trading, since they could be being sold in a misleading way and confusing the consumer.
CML director general Michael Coogan said: "Controls exist for action taken by mortgage lenders when customers are in arrears but there are no such safeguards for customers entering into sale-and-leaseback schemes.
"In a climate of rising repossession, consumers in financial difficulty need to be well informed and protected.
"The government needs to consider urgently whether regulation of sale-and-leaseback schemes by the Financial Services Authority is appropriate because it would provide protection for potentially vulnerable consumers."
Shelter's Adam Sampson went further, calling the actions of some sale-and-leaseback schemes "daylight robbery".
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