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The sale and rent back sector is to face the scrutiny of the Office of Fair Trading (OFT) in its latest market study.
Also known as sale and lease back, the arrangements involve individual homeowners selling their property at a reduced rate, in return for the right to remain in the house as a tenant.
The OFT believes that the take-up of sale and rent back may increase in future as households continue to feel the effects of the credit crunch.
In response to this it will look at the way in which these products are sold as well as whether existing rules and regulations on the initiatives are sufficient to give consumers adequate protection.
"Sale and rent back schemes might be helpful for some consumers but there are a number of potential concerns including whether consumers in difficult circumstances are making well informed choices," John Fingleton, OFT chief executive, said.
"We are therefore prioritising this work to take a good look at whether consumers are adequately informed and protected."
The OFT expects to have completed its work by this September.
