NLA code of practice for sale and rent back

Michael Holt, MD of SYH Charterhouse, comments on NLA code of practice for sale and rent back: “This is a welcome development. There is clearly a place for ethical sale and rent back in the current climate but there need to be stringent measures in place to ensure consumer safety.

Guidelines such as Key Facts documents, independent legal advice, the right to redress and independent valuations are all part of the actual regulatory requirements for equity release and should therefore be observed as best practice for any sale and rent back scheme.

Reputable companies are now taking steps towards ensuring consumer safety and guiding principles such as these should help weed out the less scrupulous “rogue operators” in the sale and rent back market.

However, these guiding principles are currently only a code of practice and do not provide the protection that regulation could offer. The FSA has the power to shut down any equity release provider that is not acting appropriately and within regulatory requirements – similar regulation should be applied to sale and rent back. This is particularly important when, as David Salusbury of the NLA points out, that sale and rent back is dealing with often vulnerable individuals who are in an already stressful situation.

We strongly believe that sale and rent back is a market that should be regulated, not only for the protection of the consumer but also to help improve the reputation of both regulated equity release and the ethical sale and rent back markets.”