The sale and rent back area of the property market "desperately needs" regulating, one property expert has claimed.
According to the Homeowners Advice Centre, this trend - which involves homeowners selling their property at a discount in return for the option to remain in the house as a tenant - has increased steeply during the last few months.
However, spokesperson for the Homeowners Advice Centre Al Elliot said that popularity of the scheme would never be as widespread as other equity release schemes because the propositions vary so widely.
"Certainly people who can no longer remortgage at competitive rates will consider this as an option," he stated.
But until it is fully regulated struggling homeowners will always re-finance if the remortgaging was available as an option, concluded Mr Elliot.
The Office of Fair Trading has recently launched an investigation into the practice.
Re-mortgage:- JST Financial, New Mortgage, Re-mortgage Specialists catering for good and adverse credit for UK homeowners