Homeowners in distress who have sold their property to a ‘sale and rent back’ company in the belief that they will be able to live their for the rest of their lives, only be to kicked out a year later, will be pleased to learn that this sector is now to be regulated by the Financial Services Authority.
An interim regulations period (while they work out how to regulate it properly – although the draft rules are said to be ‘near final’) will start on 1 July 2009 and firms will be expected to apply for ‘interim permission’ between this date and 1 August. A consultation paper is expected for September, with full regulation from the end of June 2010.
During this interim period, firms will need to meet FSA threshold conditions including the requirement to have adequate resources and to be run by fit and proper people. Firms will also have to comply with the Principles for Businesses and meet a number of systems and controls and conduct of business rules.