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Sale and rent back agreements to be regulated

The Financial Services Authority will regulate the sale and rent back market from 1 July in a move which will protect many homeowners in the UK who have been tempted by the scheme. Historically these particular schemes, which see property sold at below the market price in exchange for a long-term rental agreement, have attracted the attention of cash-strapped investors looking to maximise their assets.

However, while it would be wrong to suggest that all sale and rent back companies have misled their clients, a number of complaints have been made over the last two years. Whether this was because of direct misleading by certain companies or in fact a misunderstanding between the two parties is open to debate but as of 1 July the complaints procedure and monitoring of such transactions will be very much tightened.

Initially the Financial Services Authority had refused to become involved in the sector claiming they were pure property transactions and outside of their remit. However, after an investigation by the Office of Fair Trading the situation has been amended and the FSA will become more involved in the future.

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