Sale and leaseback property deals are being questioned as legitimate sources of corporate finance as Southern Cross, the struggling care home provider, labours under the high rents imposed by its sales programme five years ago.

During the property boom years, sale and leasebacks – in which companies sell property assets and then rent them back – became increasingly popular as companies realised that their properties could be turned into easy cash in a rising market. However, such deals also involved taking on long-term rental liabilities, and often in complex structures.