Crown Equity Release has urged pensioners and the industry to be cautious when considering sale-and-rent alternatives to equity release for the elderly.
It claims that many unscrupulous firms are targeting cash-strapped pensioners who have valuable assets, buying their homes at below market value and renting it back to the former owners. However, in a large number of cases this can leave ex-homeowners open to the threat of eviction.
Managing director Mark King says: “The recent widespread reports that some unscrupulous sale-and-rent companies are offering an alternative to equity release should be treated cautiously by all in the industry. If in retirement you are selling on reversion or mortgaging your home for financial reasons then the last thing you will want to do is pay rent.
Most elderly people take out a lifetime mortgage or a home reversion plan to raise capital and so an extra strain on their outgoings can leave many in a vulnerable position. Consumers should guard against the possibility of losing their homes and even facing eviction by seeking independent advice from a registered IFA and only dealing with FSA regulated buyers.”