Sale and rent back regulation welcomed - buy to let mortgages

16 February 2009

Proposals for increased Financial Services Authority regulation of the sale and rent back (SRB) sector have been welcomed by an industry insider.

Al Elliott from the Homeowners Advice Centre said that the measures - which are designed to protect consumers considering selling their home and leasing it back to free up cash - will help to boost the credibility of the industry.

He stated that the move will "hopefully reduce the marketplace down from the hundreds of part-time landlords operating as SRB companies to a handful of well regulated, responsible providers".

Holders of buy to let mortgages looking to enter this sector may wish to take note of his comments.

Recently, the Office of Fair Trading published a study into SRB schemes that found some homeowners may enter into such agreements when they might not be their best option.

It also noted that some SRB companies may mislead people over the security they have as tenants or the price of their properties.