NLA will support FSA regulation of sale-and-rent-back

Permalink: NLA will support FSA regulation of sale-and-rent-back
by Gill Montia

The National Landlords’ Association (NLA), which represents around 20,000 individual landlords across the UK, is stressing its level of commitment to raising standards in the sale-and-rent-back sector.

The body is responding to an Office of Fair Trading (OFT) Market Study on the industry, which is recommending that sale-and-rent-back should be regulated by the Financial Services Authority (FSA).

In recent weeks, the NLA has confirmed that its own sale-and-rent-back code of practice will include legally enforceable financial penalties and that it remains keen for a market-led solution to issues of bad practice, where possible.

However, NLA chairman, David Salusbury, has stated that the OFT’s recommendation of FSA regulation will not affect the NLA’s commitment to improving standards in the market and goes on to pledge the support of the NLA to the Government and the FSA, as they consider the implications of the OFT report.

In July of this year, research by financial website Fool.co.uk also revealed that homeowners who may opt for sale-and-rent-back have low levels of understanding about the schemes.

Twenty-six per cent of those questioned thought that a sale-and-rent-back agreement would give them the option of staying in their homes indefinitely, and had no idea that homeowners-cum-tenants can be evicted if their new landlords fail to meet mortgage payments.

The sector has also received bad press because some sale-and-rent-back companies pay less than 60% of the market value for properties.