'Sale and rent back' landlords face stricter regulations
News Category: Industry News
Published: 30-Sep-2009
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The Financial Services Authority has announced strict new measures regulating landlords in the sale and rent back market.
Its proposals, which are due to come into effect from July 2010, include the banning of cold calling and forbidding the use of emotive terms such as 'fast sale' and 'mortgage rescue' in promotional literature.
There will also be a cooling-off period to give consumers more time to make decisions, along with a requirement that every sales firm checks the consumer can afford the deal.
It must also be ensured that users of the system have security of tenure over the property.
Catherine Hearnden, director of MyMortgageDirect, said that although sale and rent back schemes should be praised for allowing people to stay in their homes, the tighter regulations were necessary.
"There have been some horror stories about companies getting on the bandwagon and basically ripping people off," she said.
"I think the people who take out these schemes need to have more protection."
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