Regulation 'will improve sale and rent back schemes'
News Category: Legal
Published: 10-Feb-2009
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New laws could streamline the number of companies offering sale and rentback (SRB) services, ensuring higher standards, it has been suggested.
Al Elliott, co-owner of the Homeowners Advice Centre, said regulation from the Financial Services Authority could reduce the number of part-time landlords who operate as SRB firms.
He believes this trend would then leave a "handful of well regulated responsible providers with a long-term (50-year) approach."
Some professional landlords - investors who own 20 or more properties - have been able use SRB opportunities to their advantage, according to a study by market agency Business Development Research Consultants.
A review of the rental market by the firm last month said professional landlords were also taking advantage of falling property prices, auctions and repossessions to add new homes to their portfolio and post higher profits, despite the economic downturn.
But Mr Elliott's comments come after a study by the Office of Fair Trading last year suggested that some consumers might have entered into SRB agreements when such a move was not the best option for them.
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