The UK Government must ensure that Scottish homeowners are protected from sale-and-rent-back schemes operated by private landlords, Deputy First Minister Nicola Sturgeon has stressed.

In a letter to the Minister for Trade, Investment and Consumer Affairs, she has called for more help for those who have fallen into financial difficulties as a result of mis-selling. 

Sturgeon's calls follow a recent Office of Fair Trading (OFT) report which raised concern over whether consumers fully understand the costs and risks associated with these schemes, whereby homeowners give a significant amount of equity in return for staying in their home as a tenant.

The OFT subsequently recommended that sale-and-rent-back schemes be subject to statutory regulation by the Financial Services Authority (FSA), a recommendation Sturgeon has backed.

She commented: "I am deeply concerned that Scottish homeowners may be exploited by unscrupulous operators taking advantage of weak legislation.

"It is imperative, given the state of the housing market, that the UK Government takes speedy action to regulate the sale-and-rent-back market and provide real protection to homeowners.

"The Scottish Government is already doing everything in its power to help homeowners in difficulty because of the global credit crunch."

The SNP Government recently came under heavy criticism from the Scottish Liberal Democrats over its lack of action to protect Scottish homeowners from repossessions.