So-called 'mortgage rescue schemes' are to be thoroughly investigated...

Householders in difficulty are offered a quick sale of their home at a discount by buy-to-let investors and in return become a tenant in the house. Consumer groups have called for regulation of these schemes, also called "sale and rent back".

John Fingleton, OFT chief executive, commented: “ We want to take a good look at whether consumers are adequately informed and protected. Sale and rent back schemes might be helpful for some consumers but there are a number of potential concerns including whether consumers in difficult circumstances are making well informed choices”.
 
A growing market

The sale and rent back market is relatively new but has been growing quickly. It could continue to rise in popularity with more people predicted to be facing repossession this year. The Council of Mortgage Lenders predicts that there will be 45,000 repossessions in the UK in 2008, up from 27,100 in the previous year.

On 9 May, the Ministry of Justice said the number of orders made by the courts in England and Wales at an early stage of the repossession process rose 17% in the first quarter of 2008.

Glen Ackroyd, director of one of the largest firms, a-quick-sale.co.uk, told the BBC's The Truth About Property programme: I estimate some 20,000 people sell their homes to mortgage rescue companies every year. I lead a trade association, the Property Buyers' Association, which - alongside charity Shelter and the Council of Mortgage Lenders - is calling for these schemes to be regulated”