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.

The Office of Fair Trading launched research on Wednesday 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.