Elderly advised to be wary of sale-and-rent-back schemes

Older consumers are being warned to think carefully before taking up a sale-and-rent-back offer on their home, as a quick-fix solution may not be beneficial in the long-run.

Key Retirement Solutions has highlighted the danger of rushing into such schemes, pointing out that companies who provide them often target the vulnerable.

In most cases, a sale-and-rent-back scheme involves a firm buying a property from a homeowner for around 70 or 80 per cent of the original price and then renting it back out at market rates.

Dean Mirfin, Key Retirement Solutions’ business development director, explained: "Concern is certainly on the up about sale-and-rent-back schemes, a dramatically increasing unregulated sector of the property market."

"In these cases, speed should really not be of the essence as such a big decision linked to the ownership of a home should be carefully thought through, including family members, and an adviser should be consulted who can discuss all possible options."

According to figures from Credit Action, 14,000 properties were taken into possession during the first six months of 2007.