OFT slams Sell And Rent Back companies
The Office of Fair Trading (OFT) has taken action against twelve companies in the sell and rent back (SARB) market, over statements they made in their advertising.
The OFT asked the firms to substantiate claims made in their adverts or change them.
The resulting action by the OFT has now led to three companies no longer offering the service, six have removed their websites, and a further three have made amendments to their website. Two more have been reported to the FSA.
A key point of contention were claims that residents were able to live in properties for life after they have sold them under SARB, else benefit from low rent, or buy back their homes at any point.
The Sell And Rent Back market has been flooded with opportunists over the past year, resulting in threats to consumer interests and the potential to be exploited by unscrupulous businessmen.
This is especially as they seek to build up property investment portfolios during the downturn, by trying to tap into the market in Below Market Value (BMV) properties.
The result has been a situation open to abuse, with lack of controls to protect consumer interests.
The FSA has already announced that the market will become regulated from next July, a move broadly welcome by established SARB companies who already have a long-standing presence in Britain.
Accordingly to Jason Shaw at MPG Investments, “The industry in general has suffered a reputation problem, after opportunists began moving away from the buy-to-let market. Unfortunately, this meant that a number of individuals and small companies sought to exploit debt in a way that should never have been considered acceptable.”
“That’s why we’re happy that the FSA has finally stepped in, to ensure that all companies in the sale and rent back market are forced to operate at the same level of professionalism that MPG has insisted on for over five years.”