Sales and rent back market for regulation
29 Jun 09
The Government is introducing secondary legislation to bring sale and rent back agreements within the scope of Financial Services Authority regulation
The Government also published a summary of responses to its consultation on the sale and rent back market, which closed on 1 May 2009. The FSA is expected to publish shortly details of its regulatory regime, which is expected to take effect on 1 July 2009, subject to Parliamentary approval.
The Government’s consultation followed an Office of Fair
Trading market study published at the end of last year, which looked at the impacts of the growing sale and rent back market.
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 last month 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.
Yvette Cooper, at the time Chief Secretary to the Treasury (she was promoted in June to Secretary of State for Work and Pensions) 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.”.