SNP Westminster DWP Spokesman, John Mason MP, has tabled an early day motion in the House of Commons calling on the UK Government to take action to protect homeowners who enter into sale and rent back agreements.

A six month investigation by the Office of Fair Trading recommended the Financial Services Authority take on the regulation of the sale and rent back sector, including ensuring anyone considering sale and rent back is given independent financial advice and that the UK Government clarify the position in relation to housing benefit of those using sale and rent back schemes.

John Mason joins his SNP colleague in the Scottish Parliament, Bob Doris MSP, who tabled a motion on sale and rent back agreements last week.

Commenting, Mr Mason said: "As the recession bites, families across Scotland are feeling the pressure financially. With increases in food prices and rising bills, many homeowners are struggling to meet mortgage repayments and are turning to unregulated arrangements such as Sale and Rent Back agreements.

"While they might seem like a quick fix, they often create greater uncertainty in the long term as the terms of the rental agreement may only be agreed for as little as six months. Action must be taken to regulate these agreements and promote understanding of their risks.

"I would strongly advise anyone who finds themselves in financial difficulty to call the National Debtline on 0808 808 4000 where they can access free and impartial advice."

Note:

The text of the EDM:

GOVERNMENT ACTION ON SALE AND RENT BACK AGREEMENTS

That this House notes the current economic crisis has caused widespread uncertainty and placed huge pressures on homeowners; recognises that as many as 55 000 homeowners to date have turned to unconventional and unregulated housing agreements such as Sale and Rent Back (SRB) agreements to ease these pressures; further notes that these arrangements often create huge uncertainty as tenancies are not guaranteed in the long term; welcomes the publication of the Office of Fair Trading Market Study Report and its examination of the problems surrounding SRB agreements; notes the recommendations of the Office of Fair Trading to create a regulatory framework for SRB agreements and to promote consumer understanding of their risks; expresses disappointment at UK Government’s weak response to these recommendations, pledging no more than impact assessment and consultation; and calls upon the UK Government to take decisive action to help struggling homeowners by implementing these measures immediately.