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
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.