Sale and rent back schemes

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Sale and Rent Back

Following horrendous cases of exploitation of an already vulnerable sector, the OFT called for regulation of the sale and rent back market.

Sale and rent back schemes are now regulated by the Financial Services Authority (FSA).

While some firms offering these schemes are large organisations offering certain guarantees, many are small operations looking for cheap buy-to-let purchases.

The equity release organisation Safe Home Income Plans (SHIP) also wanted sale and rent back to be regulated. The Office of Fair Trading wanted to see these firms forced to produce contracts that are transparent about the value of the property and terms of tenancy.

As a result, the FSA has

• banned exploitative advertising and high-pressure sales techniques and prohibited the use of emotive terms like ‘mortgage rescue' in promotional literature
   

• introduced a 14-day cooling-off period to give consumers more time to make decisions on sale and rent back
   

• banned cold calling and prohibited firms from dropping promotional leaflets through letter boxes
   

• confirmed rules to ensure consumers have security of tenure for a minimum of five years
   

• introduced an affordability and appropriateness check across all sales to check that the sale and rent back deal is right for the consumer
   

• put in place measures to ensure all risks are clearly signposted to the customer, via FSA literature and during the sales process.  

We do not operate in this sector of the market and be warned - salespeople pushing these schemes do not need to be qualified advisers.

Just complete the form and we'll ring you to discuss your options, or call free of charge 0800 0025 161