Proposals for the Financial Services Authority to regulate the sale and rent back (SRB) sector have been welcomed.
The measures are designed to protect people who enter into agreements to sell their home and live in them as tenants, possibly to help them with debt management.
Homeowners Advice Centre spokesperson Al Elliott said that the plans could improve the credibility of the industry and tackle irresponsible landlords.
It will “hopefully reduce the marketplace down from the hundreds of part-time landlords operating as SRB companies to a handful of well-regulated, responsible providers”, he remarked.
His comments came following the publication of an Office of Fair Trading study, which found that some homeowners enter into SRB schemes when it is not the best option for them.
The report claimed that people can be misled by SRB firms over the security they have as tenants, as well as the value of their homes.
By Jamie Price