The government has introduced secondary legislation to bring residential sale and rent back agreements within the scope of Financial Services Authority (FSA) regulation yesterday.
Deirdre Hipwell, Property Week – 3 June 2009
It has also published a summary of responses to its consultation on the sale and rent back market, which closed on 1 May 2009.
The FSA said it will publish the details soon of its regulatory regime, which will take effect on 1 July 2009 subject to parliamentary approval.
The government’s consultation followed an Office of Fair Trading (OFT) market study published at the end of last year, which looked at the impacts of the growing sale and rent back market.
Sale and rent back offers homeowners the option of selling their properties at discounted rates in exchange for tenancy arrangements.
The OFT report identified a number of risks to homeowners entering into these arrangements and made three recommendations to government, including compulsory regulation, increasing consumer awareness and improving information about housing benefits.
The legislation laid in parliament yesterday includes a two-stage approach to regulation, in order to ensure consumers are protected as quickly as possible in the current market environment. The FSA will put in place its full regulatory regime in the second quarter of 2010, following consultation and the publication of its final rules.
The chief secretary to the Treasury, Yvette Cooper, said: ‘The Office of Fair Trading found last year that vulnerable homeowners were at risk from unscrupulous sale and rent back operators. It’s not right that people can be pushed out of their homes through dodgy deals.’
I think one of the main reasons regulation was brought in was because some companies were advertising stay in your home forever when that simply was not the case this obviously decieved people. In some cases these companies had to stop trading altogether. At least now people won’t be tricked out of their homes
Comment by Sell and Rent Back — 27/8/2009 #