23-10-2007
New call for regulation of sale-and-leaseback schemes
News by Adfero for Simply Business - providers of independent business insurance, business finance, landlords insurance, buy-to-let mortgages & commercial mortgages.
Several organisations have joined forces in calling for the regulation of sale-and-leaseback schemes, it has been revealed.
According to reports, Citizens Advice, in participation with Shelter and the Council of Mortgage Lenders (CML), has called for the UK's treasury to permit the regulation of such schemes by the Financial Services Authority.
"Controls exist for action taken by mortgage lenders when customers are in arrears but there are no such safeguards for customers entering into sale-and-leaseback schemes," said Michael Coogan, director general for the CML.
"In a climate of rising repossession, consumers in financial difficulty need to be well informed and protected," he added.
All three bodies have expressed concern that such schemes lead to the sale of a property at a discount, as the valuation of the property is not ascertained independently; there are also concerns that tenants have insufficient levels of security once the property is sold.
An investigation by the Office of Fair Trading has also been recommended by the group.
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