John Mason, the MP for Glasgow East, has tabled an early day motion in the House of Commons calling on the UK Government to take action to protect homeowners who enter into sale and rent back agreements.

A six-month investigation by the Office of Fair Trading recommended that the Financial Services Authority expand its remit by taking on the regulation of the sale and rent back sector, including ensuring that anyone considering sale and rent back is given access to independent financial advice. The investigation also called on the UK Government to clarify the position of those using sale and rent back scheme in terms of their eligibility for housing benefit.

Commenting, Mr Mason said:

“As the recession bites, families are feeling the pressure financially. With increases in food prices and rising bills, many homeowners are struggling to meet mortgage repayments and are turning to unregulated arrangements such as Sale and Rent Back agreements. I am involved witfh cases in Easterhouse and Shettleston where people have turned to these schemes only to experience problems later.

“While they might seem like a quick fix, they often create greater uncertainty in the long term as the rental outlay may only be fixed for a six month period. Action must be taken to regulate these agreements and promote understanding of their risks.

“I would strongly advise anyone who finds themselves in financial difficulty to call the National Debtline on 0808 808 4000 where they can access free and impartial advice.”