FSA Declare the Sale and Rent Back Market Officially Closed

07 February 2012 Categories: News

Sale and rent back companies around the UK are finding themselves in a bit of a quandary this week after the Financial Services Authority declared the sale and rent back market temporarily closed. A report published by the FSA states that a lot of the deals made over the last few years are unsuitable for the property owner and should never have been sold.

Under the terms of a sale and rent back deal the property owner sells their property to a registered firm who then rents the property back to them. This type of deal is very much thought of as a last resort in the world of property and mortgages but the current economic crisis has meant that more deals are going ahead each year.

The FSA report found that many of the registered sale and rent back firms failed to consider the long term needs of their customers, while also giving inaccurate information and running financial promotions that breached a number of FSA rules.

Nausicaa Delfas, the FSA mortgage and general insurance manager, commented “The resulting temporary closure of this market could have been avoided if sale and rent back firms had taken the time to fully understand their regulatory responsibilities and customers’ needs. It seems most were more focused on their own commercial success rather than the welfare of the customers, with one firm even resorting to fraud.”