Rogue sale and rent back providers will be caught out by code of practice

National Association of Sale and Rent Back (NASARB), the only market-wide national trade body for the sale and rent back sector, has confirmed that a voluntary code of practice will focus on protecting consumers from rogue providers.

Following NASARB's first committee meeting in January, consultation is now underway across the sector in order to develop a code of practice which will leave rogue operators high and dry and provide consumers with all the information they need to make an informed decision.

Sale and rent back is an option providing flexible tenure and the ability to remain in their property for those who can no longer afford home ownership. Unfortunately, a number of rogue providers have been buying the property far below market value and only offering six month assured shorthold tenancies, thus providing minimal security of tenure for tenants.

John Socha , Chairman, NASARB Committee, said: "For the most part, sale and rent back providers are trying to offer owner-occupiers who find themselves unable to keep up with mortgage payments the chance of not having to leave their home.

"However, 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 code of practice will take into account the Financial Services Authority principles of Treating Customers Fairly and will give providers a benchmark for good practice while offering consumers the necessary protection. A key part of the code will be a comprehensive and independent complaint and redress mechanism allowing consumers to report bad practice. It will also ensure tenants are treated fairly and enter into sale and rent back agreements fully informed.

The draft code of practice will be published in April.