In particular, sale and rent back schemes have been criticised for their method of buying property at less than the market value, with companies’ advertising stating that it would pay as little as 60 per cent of the property value.
Dean Mirfin, director of Key Retirement Solutions, criticised sale and rent back, as the method differed from other regulated products.
He said: “Some of the biggest sale and rent back providers on the market are able to use scaremongering tactics to slam another regulated options for releasing the money in your home, such as remortgaging and equity release, to make sale and rent back seem more advantageous.
“This shouldn’t be allowed to continue as vulnerable people could be swayed from going down a regulated route and instead entering into a potentially disastrous sale and rent back scheme.
“If people are considering unlocking any cash in their home the only advice should be to make sure they seek independent financial advice, ideally from an adviser that specialises in this area – they will then be are fully armed with information to make an informed decision.”
Alison Beeston, compliance and education manager at Bridgewater Equity Release, said: “I am concerned as this area is unregulated and there are suggestions that the clients that they deal with do not understand what they’re getting into. There is no assurance that they can stay in their homes or get convalescent care as there is no protection back-up. The regulator is concerned about it and can see the potential damage.”
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