OFT market study for evolving Consumer Code of Practice

Posted under General by Alan

A consumer protection code of conduct is in the offing for the rent back market, as the Office of Fair Trading (OFT) is expected to publish its findings of the market study in next ten days.

The National Landlords Association of the UK informed that it had proposed legal sanctions and financial penalties in its draft of the code of conduct for non-compliance.

The NLA’s draft was published in August 2008 for suggestions. It received wide response from stakeholders including Shelter, Crisis, Council of Mortgage Lenders, Citizens Advice, Royal Institute of Chartered Surveyors, Chartered Institute of Housing, National Federation of Property Professionals and British Property Federation.

The draft was also welcomed by private landlords and major companies of the rent-back market. The respondents opined that Code of Practice would serve as an effective framework and foundation for developing robust system. It would provide protection to consumers by scrutinising rent-back transactions.

According to NLA’s chairman David Salusbury, protection of vulnerable consumers at the earliest was the critical factor irrespective of whether NLA’s voluntary Code of Practice was a step in the direction of sale and rent-back regulation or an end in itself.

Salusbury remarked that sale and rent-back was an inappropriate practice but admitted that ethical practices needed to be explored for those families which could no longer afford to buy home of their own.

The association has been acknowledging that there were some investors who lost no opportunity in making a quick buck, and a code of practice was essential to keep a check on such people.