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Sale and rent back
Sale and rent back is when you agree to sell your house at a lower price, inreturn for being allowed to stay on in your house and pay rent to the newowner.
Many people are using this way of selling a house to get out of financial trouble.
 Because of this, the government is worried that buyers will takeadvantage of people's vulnerable financial status and the stressthat is causing them, and that people might take unnecessaryrisks if they feel they have no other choices.
Sale and rent back often means you need to draw upcomplicated contracts, and if you are stressed by yourfinancial problems it makes it a lot more difficult to get a fairdeal.
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Sale and rent back
The government would like sale and rent back to have specific laws tokeep it under control, and they would like the Financial Services Authorityto be in charge of those laws. The new laws would be in place by 1 June2009, and the Financial Services Authority need to put some basicprotection into place for then.The Financial Services Authority want to know what you think about theirplans to look after sale and rent back agreements. Please send your ideas,reactions and thoughts about sale and rent back to the Financial ServicesAuthority before the
1 May 2009
.
How to respond
Through the Financial Services Authority website Emailcp09_06@fsa.gov.ukWrite to:
Ian PriceRetail Policy and Conduct Risk Division
Financial Services Authority25 The North ColonnadeCanary Wharf London E14 5HS
 
In brief 
Except for people who are already trained to deal with sale and rent backagreements, for example lawyers, solicitors, registered social landlords orlocal authorities, the Financial Services Authority wants to have controlover:
•
how people make a sale and rent back agreement
•
how the contract is drawn up
•
how changes are made to the contract
•
advice that sale and rent back customers get.If you or your company are involved in sale and rent back agreements, youwill need to apply to the Financial Services Authority for permission.
How does sale and rent back work?
The idea behind sale and rent back is that sellers offer their homes at alower price, often 20-30% lower than the value of their house, in returnfor renting their home back at normal rates, or sometimes less than thenormal rate if they've sold the house for an even lower price.Mostly this involves selling and renting back all of the property, but latelythere's been more cases where people sell up, then only rent back part of the house.
How many businesses are involvedin sale and rent back agreements?
There are over
1000 businesses
which deal with sale and rent backagreements. Previously these businesses were mostly limited to localauthorities and social landlords, but the market has expanded in recentyears.
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