The HM Treasury have contacted me as they would like more information on the Sell and Rent Back type of business. They sent me a letter asking me to fill in a questionaire as the media have shown concerns in these types of transactions.
This is the letter they sent me:
The wording of the letter:
As you will be aware there has been some recent interest in the sale and rent back market. Mortgage industry representatives and consumer groups have expressed some concerns about the experience of consumers considering these types of products.
Her Majesty’s Treasury, the Department for Business, Enterprise and Regulatory Reform, the Department for Communities and Local Government, and the Ministry of Justice, working alongside the Financial Services Authority (FSA) and the Office of Fair Trading (OFT), are therefore seeking to establish further and better information on the sale and rent back market, and the role that these schemes play in the UK housing market.
We would be very grateful for your response to the attached questionnaire, which will help us to understand the market from an industry perspective. We would be happy to discuss this issue with you directly.
HM Treasury Concerns
Their concerns are totally understandable and I will help them in everyway they can to learn more about “sale and rent back” transactions. With many horror stories from families who have sold their homes to rent them back its no wonder that these transactions have been highlighted by the media.
I reported recently about Repossessions Stopped going into liquidation and getting their tennants evicted. I’ve also heard of other horror stories of families who have sold their homes at big discounts to rent them back, but only to find their homes in the next property auction listing to be sold on by the investors.
As the industry is unregulated there are many unscrupulous and unethical operators who are just out to make a very quick buck out of desperate and naive people. Anything that can be done to weed these operators out will be welcomed by the handfull of ethical and hard working landlords. It is very annoying that us honest and ethical landlrds have to be tarnished with the same brush as the cowboys of the industry.
Some of the good landlords in the industry are dishearted that the FSA cannot regulate sale and rent backs as they are not a financial product as such, they are property trancactions. They are working together to set up a trade body for which a code of conduct must be followed. I welcome the move, I am however concerned that a trade body will not get rid of the cowboys as mandatory membership cannot be enforced. Not yet at least.