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Following wide-reaching consultation across the housing and mortgage sectors, the Code places the protection of vulnerable consumers at its heart. More and more people are now facing financial difficulty including so-called 'payment shock' and the inability to keep up with their mortgage payments. Ethical sale and rent back could be a way for some struggling homeowners to stay in their homes.
David Salusbury, Chairman, NLA, welcoming the publication of the draft Code, said: "Unsurprisingly, sale and rent back continues to be a controversial issue. Far from being an alternative to the many equity release products aimed at older people, sale and rent back offers flexible tenure for those can no longer afford the costs of home ownership. For some, becoming tenants will be a temporary stop-gap while they get their finances back in order. For others, they will reap the benefits including cost - of living in rental accommodation.
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"The draft Code should be seen as a work-in-progress. We are putting it out for consultation so interested parties can submit their opinions about how the Code could be improved but also to indicate the seriousness with which the UK's leading landlord association takes its responsibilities for raising standards across the private-rented sector.
"As we have said before, people's homes are not like other commodities. We must act in order to ensure those consumers facing financial difficulty and imminent repossession are protected from rogue landlords."
The Office of Fair Trading has now launched a market study into sale and rent back which is due to complete its work in September. One of the possible outcomes following the OFT market study could be to encourage the development of a consumer code of practice.
(CD/JM)
