CIH demands government regulation to prevent targeting of vulnerable homeowners, alongside mortgage rescue scheme

The Chartered Institute of Housing (CIH) has called on the government to regulate the sale-and-leaseback sector, which it claims is creating misery for vulnerable homeowners.

The CIH believes that some firms in the sector are targeting people with growing debts - including in some cases negative equity - or facing imminent repossession.

Sarah Webb
Webb: "unregulated sector offering inappropriate financial solutions"

It has warned that “misery is being stored up” that will keep homeowners suffering even after the credit crunch, and wants the government to regulate the sector area urgently to protect homeowners and help them make informed decisions.

The housing body is particularly concerned at the speed of some sale-and-leaseback transactions - with exchange within 24 hours and completion in two weeks in some cases - and the type of tenancies being offered.

The CIH is calling for the Office of Fair Trading (OFT) to speed up its plans to examine the sale-and-leaseback sector, announced in May, to put in place protection for homeowners sooner.

It is also calling for a government-run short-term mortgage rescue scheme to help the 45,000 households in danger of repossession this year.

Sarah Webb, CIH chief executive, said: “Many homeowners are already paying the price for the mistakes of some financial institutions. It seems inconceivable that we can expose homeowners to a second round of misery from an unregulated sector which may be offering inappropriate financial solutions.

“We would urge the OFT and government to look at this market now and put in place some essential protection for worried homeowners.

“In addition, homeowners need a genuine choice to help them stay in their own homes and we would urge government to introduce its own mortgage rescue plan using trusted and regulated landlords - who are able to provide a service which will always be in the long-term interests of homeowners."