OFT closes down whole industry

Click to follow
The Independent Online

The City watchdog has clamped down on sale and rent back firms, which prey on struggling homeowners.

The companies target people by offering to buy their home and let them remain paying rent.

But a damning report published by the Financial Services Authority yesterday showed that most sale and rent back deals were unaffordable or unsuitable.

The regulator has effectively shut the entire industry by referring one firm to its enforcement division and cancelling the permissions of others.

At the industry's height around 2008, an estimated 1,000 firms offered the deals. They would often pay a pittance for properties and then sell them on for a fat profit, leaving the tenants with no rights and at the mercy of new owners who could hike up rents to unaffordable levels.