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Citizens Advice response to FSA regulating Sale and Rent Back companies

3 June 2009

Responding to the FSA announcement today on regulating Sale and Rent Back companies, Citizens Advice social policy officer Peter Tutton said:

“We have seen where the sale and rent back sector has caused considerable detriment in the past. While sale and rent back agreements might be the right thing for some people, Citizens Advice Bureaux have reported numerous cases where bad practice has resulted in people losing both substantial sums of money and where they were not permitted to remain in their home in the longer term, finding themselves homeless within a year.

"We have been calling for regulation of sale and rent back agreements since 2006 and are relieved that action is being taken quickly, especially considering the impact of current climate where more people are struggling with mortgage arrears, facing the threat of repossession and may be attracted by what appears to be a solution.

“This will provide much needed protection for consumers, stop cowboys and provide controls on who can provide these agreements and what they can do.”

Anyone in mortgage arrears or threatened with possession action should talk to their mortgage lender and get independent advice on all their options before resorting to sale and rent back. An experienced adviser can help borrowers negotiate with their lender and the court on making a sustainable repayment offer that may allow them to stay in their home.

The FSA's announcement can be found at www.fsa.gov.uk/pages/Library/Policy/Policy/2009/09_09.shtml

Notes to editors

  1. The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more information in England and Wales see citizensadvice.org.uk
  2. The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality. For online advice and information see adviceguide.org.uk
  3. Citizens Advice Bureaux in England and Wales advised 2.1 million clients on 7.1 million problems from April 2010 to March 2011. For full 2010/2011 service statistics see: citizensadvice.org.uk/press_statistics
  4. Out of 22 national charities, the Citizens Advice service is ranked by the general public as being the most helpful, approachable, professional, informative, effective / cost effective, reputable and accountable. (nfpSynergy’s Brand Attributes survey, May 2010).
  5. Most Citizens Advice service staff are trained volunteers, working at around 3,300 service outlets across England and Wales.