While there are no definitive numbers available, industry figures suggest that significant numbers of sale-and-rent-back landlords, who buy property from homeowners struggling to meet their mortgage repayments and rent it back to them, have left the market since relatively stringent regulation was introduced in July.
Stuart Law, chief executive of Assetz, said: “We are not convinced that the CML, which lobbied for the introduction of legislation, has thought through the effect of the new regulation on the sector.
“We believe that sale-and-rent-back made the material difference between the number of repossessions the CML predicted in 2008 (45,000), and the actual number (40,000). In the short term, regulation will mean more homeowners are repossessed – the change will have massive implications.”
“In theory, Mr Law could be right about the impact, but it is extremely difficult to quantify,” said CML spokesperson Sue Anderson.
“Half the trouble with sale and rent back is that it has been somewhat invisible – we simply don’t know to what extent it has helped people avoid repossession in the past. We don’t know how many struggling homeowners this year could sort out their arrears and avoid repossession on their own, or how many may go down the sale-and rent- back route.”
She pointed out that homeowners who rent back their properties from unethical landlords without security of tenure risk losing their property further down the line.
“As for regulation itself, of course we lobbied hard for it, to prevent people being ripped off in this way.”
The CML initially predicted that 75,000 people would have their homes repossessed this year, but revised that downwards to 65,000 in June.
Anderson said the CML was not planning to cut its forecast again at present, but she would “not be surprised” if a further downwards revision was announced later in the year.
