Growing criticism of companies that buy poor people’s homes at a discount and then rent them back under tough terms has triggered an inquiry by the competition watchdog. Financial Times, The Times

The Office of Fair Trading launched research yesterday into the treatment of homeowners by an industry that is expanding rapidly in the fallout from the credit crunch. The study, which could lead to a full investigation, comes after this year’s Budget highlighted fears about consumer protection in the so-called sale and rent back sector.

Peter Tutton, a debt policy officer at Citizens Advice, said there was an urgent need for a crackdown on a “completely unregulated market”, especially given its potential for growth in worsening economic conditions.

;While the number of problems we have seen is relatively small, the potential detriment where things go wrong is very serious, including people losing both their homes and substantial sums of money,' Tutton said.

The OFT said it had launched the inquiry after receiving complaints from the mortgage industry, consumer groups, MPs and peers. It said it expected to unveil its findings in September, although it might speed up the work if it saw people were being badly harmed in the short term.