Sell and Rent Back Regulation

The Financial Services Authority (FSA) has brought in new guidelines which begins the regulation of Sell and Rent back schemes.

Interim regulation for Sell and Rent back schemes began in July 2009 and will be rolled out well into 2010. It is hoped that the FSA will have full regulation in force by the second quarter of 2010.

The new regulations force any company wishing to offer Sell Rent Back schemes to do so fairly, with checks into the background of companies being enforced. All companies offering Sell Rent Back schemes will have to prove they have sufficient finances in place to ensure that they are fit to operate. Companies offering these schemes will show transparency and give all homeowners the opportunity to have an independent valuation. The new regulations will protect security of tenancy with all long term rental agreements continuing to be honoured.

In order to offer Sell and Rent Back agreements, companies will also have to inform homeowners that free, independent advice is available to them before a decision is made.

Proper regulation of the industry has been widely welcomed by companies associated with Sell and Rent back agreements. The regulation of this service follows on from the regulation of the Home Reversion industry which has been widely successful in protecting homeowners who are interested in schemes which could allow them to release equity in a property quickly.