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Sale and Rentback Clobbered Again by FSA - And Rightly So

30th January 2010 | back to article listings BACK    print this article PRINT

Sale and rent back was regulated last year under an interim regime imposed by the FSA. Even owning one property where the tenant is the original owner is a potential criminal activity if you are not properly regulated. www.ft.com/cms/s/2/13fcc4e0-0cc6-11df-b8eb-00144feabdc0.html

Nonetheless this interim regime doesn't seem to have stopped all of the very scurrilous practices of the industry. Buying a property from a homeowner promising long-term tenancy but then selling it from under their noses quickly afterwards a big profit is one of the things the FSA is most particularly unhappy with. Another is the huge discount to market value offered by these firms who tend to utilise legal contracts against the seller that in our view are very unfair given the relative expertise of the two parties.

A lot of companies are going to have to change their company names and domain registrations because the FSA is now going to block the use of emotive terms like 'mortgage rescue', 'cash quickly' and 'fast sale'. I think these sorts of words occur in 90% of all companies names and websites.

Residential property investment is about providing much-needed accommodation into the private rental sector, a real public service and much-needed in a country with high house prices - unfortunately much of the sale and rent back community has more than mild whiff of theft and highly suspect ethics about it and the FSA seems committed to stamping this out once and for all.

Assetz will remain out of this market until such time as it is regulated into submission and all parties involved benefit from the transaction.

This news story has come from the property investment blog by Stuart Law, CEO Assetz plc.

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