Selling houses for cash has become a popular option for many homeowners faced with financial difficulties during and following the recession, and the FSA has realised they need to protect Brits by introducing new rules for the sector.
As the global economic crisis took hold, many British homeowners found themselves struggling to pay the mortgage amid rising interest rates and wage and job cuts. Hundreds of thousands decided to sell their house for cash and then rent it back, in order to raise capital and stay in their homes. Some, however, fell prey to unscrupulous providers of sell houses for cash schemes, so the Financial Standards Authority (FSA) took action to protect homeowners by introducing new rules for the sector.
Interim FSA Rules on Sell House for Cash Schemes
Recognising the need to act quickly regarding the potential problems homeowners could face when they sell houses for cash, the FSA introduced interim measures from July 2009. It acted following figures from the Office of Fair Trading, which revealed that some firms offering sell houses for cash schemes misled customers, imposed substantial rent increases or even evicted the tenants.
Full Regulations for Firms Offering Sell Houses for Cash Schemes
As of June 30th 2010, homeowners who decide to sell their house for cash will be protected by the full set of FSA regulations. The body has banned the use of exploitative advertising and high-pressure sales techniques, with phrases such as “fast sale”, “mortgage rescue” and “cash quickly” not allowed in promotional literature. Consumers who decide to sell a house for cash will have a 14-day cooling-off period, as they would with many other types of service agreements, to ensure they have considered the move carefully. Furthermore, the FSA rules stipulate that companies offering sale and rent back schemes highlight the potential risks consumers face.
Benefits of FSA Rules for People Who Sell House for Cash
Staying in the family property can be very important for many Brits in financial difficulty and selling their house for cash can be a great way to ensure stability. The new FSA rules will mean firms cannot exploit desperate homeowners and ongoing monitoring of those offering sell house for cash schemes will ensure this remains the case.
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