Code of conduct for sale-and-rent-back

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by Gill Montia

A body representing the sale-and-rent-back sector is introducing a voluntary code of conduct to protect homeowners from disreputable traders.

The sale-and-rent-back sector has boomed in the past year, as indebted homeowners have opted to sell their homes and remain in them as tenants.

However, a number of rogue providers have been exploiting vulnerable people by buying properties far below market value and offering the previous owners of the property only minimal security of tenure.

The National Association of Sale and Rent Back (NASARB), the only national trade body for the sector, is keen to ensure that homeowners have access to all the information they need to make an informed decision.

John Socha, Chairman, NASARB Committee, says: “There are those providers who have been specifically targeting the vulnerable and not offering a secure tenancy going forward and it is this practice which is giving the entire sector a bad name. There are also cases of providers demanding massive rent hikes and owner-occupiers being conned out of their own equity. All practices which NASARB condemns.”

The draft code of practice will be published in April and will take into account the Financial Services Authority’s principles of Treating Customers Fairly.

It will also provide a means by which consumers can report bad practice.