The government is considering launching a crackdown on companies that thrive on buying properties from struggling home owners and then rent them back on unfavourable terms.

The action by the government could result in the tightening of rules covering “second charge” secured loans.

The government says that there is evidence of a calculated move by secured lenders to press for repossession as soon as they realise that borrowers are struggling to pay back their mortgage.

It says there is enough proof to show that often it is secured lenders other than mortgage companies that are pushing hard for repossession.

Shelter, is one of the many organisations that have called on the Financial Services Authority to regulate both sectors.

On Wednesday, the Office of Fair Trading confirmed that it had launched investigations on “sale and rent back” scheme.

The controversial scheme offers to buy a property at a discounted rate while at the same time allowing the owner to stay as a tenant.

Treasury chief secretary and former minister for housing, Yvette Cooper, told the Guardian that the government would be working in parallel with the OFT to look at all the options.

On Wednesday the government announced plans to purchase newly built properties from housing developers whose sales are plummeting.