Under a sale and rent back "deal, a homeowner who is struggling to repay their mortgage sell their property at a discount to businesses, they can remain in the house as a tenant. But a report by the Office of Fair Trading has found that these agreements were the best option for homeowners and some people can be quickly evacuated. As a result the Office of Fair Trading has ordered four p.m. companies to validate all claims they have made in their advertising. Ifthe Office of Fair Trading is "unfair and deceptive" practices, expects that it could include such measures as law enforcement.
The OFT said the investigating advertising typically included claims that customers can stay in their homes after they are sold, they are again with the hiring of the company to acquire the property at a fair rental price and as long as the tenant wishes. Customers were also promised that they buy their house back at an agreed date in the future. InMeanwhile, they have very flexible rental terms with low rental.
"Sale and rent back companies must be truthful and transparent information on the services they offer and the security that will have potential tenants," said a spokesman for the consumer from the Office of Fair Trading. "Clear-back advertising is especially important for the sale and rental sector, where customers could be under strong pressure from financial problems and to those who risk their Homes. These stress complicate the difficult and important decisions have to make homeowners. "
The report of the Office of Fair Trading called for the company in the industry are involved, over a thousand of them are far more transparent. (An unknown number of private landlords are also involved in this relatively new industry.)
The Office of Fair Trading, said that buying about 55,000 homes of this kind have taken place, and they have a concern that sales and expression> Rent back deals have potential to cause severe and permanent damage to homeowners when they are most vulnerable. "Consumer groups have also called for the regulation of sale and rent back schemes, which also say some" mortgage rescue plans.
It seems that a large proportion of advertising in people, which is geared withdrawal. And predict the Council of Mortgage Lenders, there could more than half a million repossessions in the UK this year, compared to around 220,000 last year.
Butthe Office of Fair Trading report suggested there were better opportunities for some of these homeowners. The report showed advertising with misleading information, with some tenancies only guaranteed for six to 12 months, although residents were led to believe otherwise, the impression that they could remain in their homes for years to come.
The report also found that some landlords raised the rent substantially and quickly moved to sell to pay the tenants to fight. And some of theformer homeowners who lost their homes after tenants anyway, because their new landlord had fallen on their mortgage default and the property was subsequently taken back into possession.
The National Landlord Association has commented that there is a place for sale and rent back schemes in the housing market, so long as they operate ethically. She said she wanted a code of conduct put in place by the Office of Fair Trading with the authority of the police to see the code. Meanwhile, the Council hasof Mortgage Lenders and Citizens Advice have urged for the swift implementation of regulation in this sector.
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