SRB websites shut down as regulator tightens screws

03/08/2009

Some UK-based sale and rent back (SRB) providers have changed their ways in order to avoid misleading customers, it has been announced.

A total of 12 firms have made business changes including taking down or editing their websites - and three of these have stopped offering the SRB service entirely.

Generally, SRB deals work through customers struggling to make their mortgage payments selling their homes to a third party for a reduced price, in return for being able to carry on living in the property as a rental tenant.

There have been complaints recently that some buyers were getting the homes too cheaply - and that others were kicking sellers out of their homes months after the deals were completed.

The sector as a whole has since been taken into tighter regulatory control, with the Financial Services Authority (FSA) assuming oversight control of SRB providers in July.

All firms were then given a month to contact the FSA and apply to continue operating - or face being shut down.

Originally, the 12 SRB providers making the latest changes had been issued formal notifications to do so by the Office of Fair Trading (OFT) in January.

Heather Clayton, OFT senior director of consumer protection, said that they had been making "unsubstantiated claims" to potential customers.

"We are pleased that these firms have agreed to change or remove their advertising," she added.

Tags; Housing Debt and Bills, Young Family Finances,

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