The UK government through the Financial Services Authority seems to have come to the rescue of home owners who after facing serious financial difficulties end up selling their homes through the sell and rent back scheme. It may appear that even though there were genuine business people who bought homes under this scheme, there were some unscrupulous dealers who took advantage of the vulnerable home owners and ended up harassing them. This will make it possible for anyone entering such a scheme to be assured of a roof over their head during the stipulated time they sign with the buyer who becomes the new landlord. Apart from coming in to put swift measures that need to be followed, the FSA will also be able to take punitive measures on those firms that do not conduct their business by following the rules of the book. Chief among them was that the former home owners could rent back their homes for up to five years.
The real aim of the rules that began applying in July 2009 is to make sure firms tell the whole truth to the prospective sellers and really explain things in black and white so that there are no hidden clauses in the agreement that would end up hurting the property sellers. The rules regarding the sale and rent back have gone ahead to deter businesses from doing high pressure advertising that did not bring all the information on the table and in the case someone enters an agreement there should a two week provision where the seller could actually change their mind. It may appear that such deals actually left a bitter taste in many people’s mouths where former home owners found themselves not only broke but also homeless overnight because their new landlords reneged on agreements they signed in good faith. The FSA simply wants to make sure that no one is lured to sign a deal that will place them in more trouble than they were in simply because they were unable to service their mortgages or loans.
The sell and rent back schemes are really such a lucrative business for the investors because they would buy a property at close to 70% of the market value and due to greed they would quickly want to evict the owners turned tenants so as to make a huge profit by selling it to a new person again. This led to recommendations that were brought up by the Office of Fair Trading that really something was going wrong out there; since most of the customers for the sell and rent back schemes were people mainly facing repossessions. With the new regulations in the book it will be now better and safer for anyone facing financial challenges to sell their homes in this scheme and be assured of a roof over their heads while they try to get back to their feet financially.
That means therefore that any home owner who wishes to sell should take it upon themselves to check first that the company they are dealing with is actually registered with FSA and have interim authorisation. The word for everyone to remember is that they have a window period of up to five years during which they can stay in their houses as tenants as long as they pay the agreed rent and therefore there should not be a fear of being evicted sooner than later. Even though people may enter the sell and rent back situation as last option, they should at least be sure that someone cares for them and has made sure that no one is going to harass them, since losing a home is not a very easy thing to deal with as it were.