Lenders welcome sale-and-rent-back plans

30/09/2009

New measures aimed at offering vulnerable consumers greater protection in the sale-and-rent-back market have been roundly welcomed by UK lenders.

Under the series of new regulations announced by the Financial Services Authority (FSA) this week and due to come into effect next June, consumers will be granted a 'cooling-off period' after signing up for a product so as to enable them to reassess their decision.

In addition, cold calling by lenders in the sale-and-rent-back sector as well as the use of overly-optimistic promotional literature will also be barred, while the onus will be placed on sales firms to ensure that a certain deal is the right one for an individual customer.

Welcoming the publication of the FSA's new paper outlining its detailed proposals for this area of the market, the Council of Mortgage Lenders (CML) noted that the proposals "appear to seek to uphold for the sale-and-rent-back sector the higher standards and levels of consumer protection that already apply in the mortgage industry".

News of the upcoming regulation comes as a number of government-led initiatives aimed at boosting levels of lending and borrowing in the UK mortgage markets start to unwind, with banks and building societies set to no longer have access to the credit guarantee scheme at the end of the year.

Tags; Housing Debt and Bills,

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