Shelter says that in the past it has seen many cases where companies pay home owners far less than their home is worth or do not allow them to stay in their home as tenants.

The charity says anyone considering rent-back should seek independent advice, make sure the firm is authorised by the FSA, and report rogue operators to the regulator.

Sam Younger, chief executive of Shelter, says: "With 65,000 homes predicted to be repossessed this year, more and more struggling home owners will be tempted by rent-back schemes in the hope they can offer a lifeline.

"However, we have seen many people exploited by schemes, financially worse off and vulnerable to homelessness.

"Now the new regulation is in place, it's absolutely vital that anyone considering taking up a rent-back scheme takes our advice and checks the company they are thinking of using is regulated.

"Following our tips will help prevent people from falling victim to a rent-back scam, and ultimately ensure they don't lose their home."