CML and Citizens Advice respond to OFT sale and rent back recommendations

The OFT’s recommendation is very clear, but the Government will now need to decide whether to accept the recommendation and bring forward specific regulatory proposals. The OFT believes this could be achieved relatively quickly and the CML and Citizens Advice would like to see prompt implementation. While further consultation on specific proposals would be necessary, both organisations strongly support the general direction outlined by the OFT. 

CML Director General, Michael Coogan, commented: 

“It is a year ago that the CML, Shelter and Citizens’ Advice first jointly called for the regulation of the sale and rent back sector. The OFT recommendation potentially brings regulation a step closer. In the meantime, there has been some progress towards improved transparency for consumers through voluntary measures, but a level playing field requires a regulatory approach to ensure appropriate protection from unscrupulous operators for consumers who may be in a vulnerable situation.” 

Citizens Advice Chief Executive, David Harker, commented: 

“Citizens Advice warmly welcomes the findings of the OFT's market study. We have seen cases of very severe problems arising from bad practices connected to sale and rent back agreements. These are long term agreements about people's homes so when sale and rent back goes wrong people can suffer huge financial and emotional loss.  While sale and rent back agreements might be the right thing for some people, consumers need the sort of robust and binding safeguards that only statutory regulation is likely to provide.  

“With more people seeking advice about mortgage arrears we are concerned that these safeguards should be put in place as soon as possible. Therefore we urge the government to act on the OFT recommendations without delay. In the meantime we call on the reputable businesses in the sale and rent back sector to develop rigorous standards of conduct in the way that sale and rent back agreements are sold and managed.”