New sale and rent back scheme introduced
Britons are to offered additional protection when involved with sale and rent back schemes under new plans announced by the Financial Services Authority (FSA), it has been revealed.
Under the new regulations, people who exchange home ownership for tenancy will be given a minimum tenancy of five years.
Furthermore, providers will be prevented from cold-calling as part of measures to protect vulnerable homeowners from exploitation.
Following the recent economic downturn, Britons may have considered such a scheme should mortgage payments have proven too high to keep up with.
Meanwhile, people not yet on the property ladder may have been put off plans to buy a home due to the costs involved, seeing them instead choose flats to rent in Shoreditch or another part of London in order to save money.
Commenting on the FSA guidelines, Kevin Still, director of debt solution specialist EuroDebt, welcomed the news that an affordability and appropriateness check has been introduced.
He added: "Sale and rent back can be a viable alternative for homeowners facing repossession and struggling with other debt problems."
Written by Ben Carter
Published 1st February, 2010
© 2010 Estates IT Limited
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The Financial Services Authority has introduced new rules to protect consumers using sale and rent back schemes, it has been claimed.