After publishing the draft Code of Practice for consultation in August 2008, the NLA has received responses from a wide range of stakeholders including Crisis, Shelter, Citizens Advice, Council of Mortgage Lenders, National Federation of Property Professionals, Royal Institute of Chartered Surveyors, British Property Federation and the Chartered Institute of Housing. In addition, there were also a number of responses welcoming the Code from private landlords and larger companies already operating within the sale and rent back market.
The majority of responses have indicated the Code of Practice could provide an effective framework and a firm foundation on which to build a robust system. This would help ensure consumer protection by shedding light on sale and rent back transactions.
David Salusbury, Chairman, NLA, said: "Whether our voluntary Code of Practice is a staging post en route to regulation for sale and rent back or is an end in itself, the critical factor is that vulnerable consumers are protected as soon as possible. The NLA believes in market-led solutions where possible and the work we are undertaking reinforces our commitment to removing "cowboys" from the entire private-rented sector.
"Sale and rent back is not appropriate in all situations. However, for some families who can no longer afford the costs of home ownership, ethical sale and rent back should certainly be explored. We are under no illusions that some property investors have seen the chance to make a quick buck. However, we firmly believe gambling with people's homes is unacceptable. Changes to the sale and rent back market must begin now."
The Office of Fair Trading has launched a market study into sale and rent back and is expected to publish in the next ten days. One of the possible outcomes following the OFT market study could be to point towards a consumer code of practice which is transparent, independent and enforceable legal sanctions for failing to comply.
