Sale and Rent Back
Written by Charlie Palmer on 10/08/2018

if you put in sale and rent back to google search, almost no advisers come up.

The FSA said in 2012 that a recent review of all 22 regulated firms resulted in it referring one firm to its enforcement division, while others have either stopped taking on new business or cancelled their permissions. "Effectively, this means the entire SRB market is temporarily shut," it said in February 2012. 

Some we are now over five years on and the "temporary" appears to be permanent. 

Amazingly there are still advisers who will advise on it - but only a very small handful in the UK, and no lenders who have products available for the market. 

This seems like a genuine example of the best being the enemy of the good. They have regulated the market into extinction.

The FSA said a recent review of all 22 regulated firms resulted in it referring one firm to its enforcement division, while others have either stopped taking on new business or cancelled their permissions. "Effectively, this means the entire SRB market is temporarily shut," it said in February 2012.  Some five years later and temporary appears to be permanent.

Sale and rent back schemes have had a full reporting regime since 2011, and the advising and selling standards can be found under MCOB 4.11.

The FCA regulates the conduct of private sale and rent schemes, and all schemes must be registered by the FCA. 

It is a criminal office for a scheme to operate if it is not registered.

The schemes tend to be promoted to struggling home owners as an alternative to repossession, and obviously fill a need for people in freefall from the property owning class into rental-poverty.

The schemes are also sometimes referred to as sale and lease back schemes. 

The client sells their home to a private company, and then rents it back from them.

The price achieved is usually less than market price., and the purchaser company then sells the house on to a “buy to let landlord”.

Tenancy arrangements are usually a “assured shorthold tenancy” and must be for a fixed term of at least five years.

The clients / sellers can be evicted at the end of the fixed term, and the landlord only has to give two months’ notice and does NOT need a reason for eviction.

Suffice to say, the market would probably be considered a “last resort” for any client.

Any queries, please contact John Downs in the first instance John.downs@ifac.eu


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