Key Retirement Solutions: OFT study into sale and rent back

Dean Mirfin, Business Development Director of independent equity release specialist, Key Retirement Solutions, comments on the OFT's intention to launch a market study into the sale and rent back sector: "As the ‘sale and rent back' sector continues to grow, so too does concern over the sales and marketing practices involved and the suitability of these schemes for many British homeowners.

"The announcement this week by the Office of Fair Trading (OFT) to launch a market study in to the sector is a welcome move and a clear indication that this market is increasingly coming under scrutiny, which can only be good news for consumers. While we intend to work with the OFT and submit our views on this market, we hope that the regulator (FSA) will take action too and investigate this market fully, and consider regulation as a matter of urgency before it becomes a future financial scandal.

"In parallel to the OFT's study, we hope to hear soon from NASARB (National Association Sale and Rent Back) who said earlier this year that they would introduce a code of practice to crackdown on unscrupulous providers. However, we strongly believe that regulation is the only way this market can be deemed safe."

Key Retirement Solutions is concerned about sale and rent back schemes for a variety of reasons:

They are not regulated as the traditional mortgage and equity release market is by the FSA, hence consumers have little protection

They are often promoted on the basis that they offer a quick and speedy sale, yet a commitment as big as this should be carefully thought through

They are being promoted by some as a means of "equity release" which will confuse consumers, yet the method of these schemes differ hugely from regulated lifetime mortgage and home reversion products

"For anyone considering unlocking cash in their home it is imperative that they seek independent financial advice, ideally from an adviser that specialises in this area. There is also alternative help for those suffering hardship and it is therefore vital that consumers fully understand all the options available to them before entering into an agreement."