Following an investigation carried out by Which? Money, in which it was found that consumers are being given substandard advice on sale and rent back schemes, they have have reported two firms to the Financial Services Authority.
According to Which?, out of 17 advisers contacted, only two offered acceptable advice. Seven of those advisers failed to advise whether SRB was the right option for the customer, with six of them going on to provide quotes.
Everyone has heard of Sale and rent back schemes (SRB), where a company will offer to buy your home and will then rent it back to you. These types of schemes are usually only a last resort for desperate homeowners, besieged by debt, who don’t want to move but need to release funds in order to live their day to day lives. They will more than likely only receive an offer of around 75/85 per cent of their property value and these figures are sold to them on the basis that they would not need to pay for any legal fees nor would they need to liaise with their own mortgage company. With many homeowners now in a negative equity situation this type of offer would not cover all of their outstanding debt and would actually mean that some contact will be required with the mortgage lender.
Which? Chief Executive, Peter Vicary-Smith has said:
“It’s simply unacceptable that people are receiving shoddy advice about such a huge financial decision.”
You can see the full article from Which? here
What do you think – what is your firm doing to protect your Clients?
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