Those landlords in the ‘sale and rent back’ (SRB) sector have only a few days left to apply for the FSA’s permission to continue operating, as the National Landlords Association (NLA) has reminded them.
Commencing on the 1st July this year, companies or individual landlords operating on an SRB basis, have had just one month to apply for interim permission to continue.
SRB is becoming a regulated activity so applicants must prove they meet certain standards and are ‘fit and proper’, treat customers fairly and make certain key details clear to their customers.
In the past, SRB has been criticised for its lack of clear details. Being regulated means that SRB must make clear the level of discount offered and that consumers understand exactly what they are doing.
John Socha, Vice Chairman, NLA, said: “The clock is now ticking if companies or individuals want to continue with sale and rent back transactions. Ethical sale and rent back must be an option for some consumers. It provides flexible tenure and the ability to remain in their property for those who can no longer afford the costs of home ownership. In the current economic climate, more and more people will be facing financial difficulty including keeping up their mortgage repayments. Although sale and rent back will not stop repossessions, ethical sale and rent back could be a way for homeowners to remain in their properties but become tenants. Only when sale and rent back operators are within a more regulated environment can we be confident that consumers will be treated fairly.”
