The Office of Fair Trading (OFT) has issued a report calling for statutory regulation of the sale and rent back sector. This is a relatively new type of property transaction whereby firms buy homes from individuals, usually at a discount, and then allow those individuals to stay on in the property as tenants. It is estimated that there are upwards of 1,000 firms, together with an unknown number of non-professional landlords, who have conducted about 50,000 transactions to date.

The OFT is concerned that some consumers enter into sale and rent back transactions when this is not the best option for them and may also be misled as to the value of their property or the security they have as tenants. Some firms have been known to impose substantial rent increases or even evict tenants after a short tenancy period. Other consumers have been evicted because they cannot afford the agreed rent, which suggests staying in their property was not sustainable in the first place.

The recommendations call for greater transparency in the transactions, free and independent advice and a redress scheme.