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Sale and rent back still a threat to older homeowners?
21 February 2008 12:00
The introduction of a new code for sale and rent back scheme providers will do little to improve the trustworthiness of this sector, according to one equity release specialist.
Guidelines being set out by the National Association of Sale and Rent Back (NASARB) will aim to prevent unscrupulous providers from buying homes from troubled borrowers at well below market value and then refusing to provide them with secure tenancies.
Yet Key retirement Solutions remains concerned by these schemes, warning that they are not properly regulated, that they prompt borrowers to be hasty over selling their homes and that they are sometimes misleadingly marketed as a form of equity release.
Therefore, while welcoming the NASARB's planned code as a positive step forward, it asserted that progress would be insufficient until the Financial Services' Authority and the government took urgent action and investigated the sector.
Key retirement Solutions urged borrowers to approach these schemes with caution at least until the code is implemented in April, as well as recommending that anyone seeking to unlock value from their home should see a financial adviser first.
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