Comment on sale and rent back schemes

Dean Mirfin, Director of independent equity release specialist Key Retirement Solutions, comments on the increase of sale and rent back schemes: “Concern is certainly on the up about ‘Sale and Rent Back’ schemes, a dramatically increasing unregulated sector of the property market. Sale and rent back schemes are being promoted by some as a means of equity release. This is naturally what they are but their method differs greatly from other regulated products.

“Some of the biggest sale and rent back providers on the market are able to use scare mongering tactics to slam aother regulated options for releasing the money in your home, such as remortgaging and equity release, to make sale and rent back schemes seem more advantageous.

“One provider states on their website - If you are considering remortgaging you run the risk of increased costs as interest rates are predicted to rise to 7.5%. If you are considering an Equity Release scheme, you should know that these are usually aimed at the elderly, are extremely complicated and are not always financially beneficial.

“This shouldn’t be allowed to continue as vulnerable people could be swayed from going down a regulated route and instead entering into a potentially disastrous sale and rent back scheme.

“If people are considering unlocking any cash in their home the only advice should be to make sure they seek independent financial advice, ideally from an adviser that specialises in this area – they will then be are fully armed with enough information to make an informed decision on all the options available. For the time being this is an unregulated sector which is ever growing in popularity and concern.”