A study has been launched by the Office of Fair Trading (OFT) to establish how the sale and rent back industry is operating in the UK.
Sale and rent back enables homeowners with debt problems to sell their property and remain as a rent-paying occupant and the OFT is keen to find out if consumers are getting a fair deal under these circumstances.
The office has suggested that the study has become necessary because more and more families are facing money problems and mortgage debt woes as a result of the UK’s economic downturn.
"Sale and rent back schemes might be helpful for some consumers but there are a number of potential concerns including whether consumers in difficult circumstances are making well informed choices," said John Fingleton, the OFT’s chief executive.
Earlier this week, Citizens Advice urged money lenders to negotiate more readily with customers that are facing the prospect of repossession.