The Financial Services Authority (FSA) has released details for its new rules and regulations which will mean a stronger framework for protection to consumers in the sale and rent back (SRB) market.

The FSA is tackling the SRB market in a two staged approach having initially implemented an interim regime in July 2009 for 12 months to deal with those consumers whose problems needed to be acted upon quickly, whilst the full regime which has now been announced, will come in to full force on 30 June 2010.

Ed Harley, the FSA’s head of mortgage policy, said: "For some people in financial difficulty, staying in their home remains very important. Selling their home and renting it back in this way can be right for them. But we are aware of some firms exploiting vulnerable consumers at a difficult time. So, it is right that we introduce these further protections, and we will take swift action where they are not met."

The FSA has banned exploitative advertising and high-pressure sales techniques while prohibiting the use of emotive terms like ‘fast sale’, ‘mortgage rescue’ and ‘cash quickly’ in promotional literature. It has also:

Introduced a 14 day cooling-off period to give consumers more time to make decisions on SRB
Banned cold calling and prohibited firms from dropping promotional leaflets through letter boxes
Confirmed rules to ensure consumers have a security of tenure for a minimum of five years
Introduced an affordability and appropriateness check across all sales to check that the sale and rent back deal is right for the consumer and put in place measures to ensure all risks are clearly signposted to the customer, via FSA literature and during the sales process.

The FSA is proactively monitoring the SRB market for unauthorised activity, and will take action if necessary, as all firms active in the sale and rent back market must be authorised otherwise they face potential fines or imprisonment.



London businesses to pay 2% levy to help fund crossrail scheme

In order to meet the £16bn cost of the Crossrail project, London businesses will have to pay a 2% rate levy from April 2010, according to London Mayor Boris Johnson.

However he has revealed that around 80% of small and medium businesses will be exempt from the 2p in the pound supplement as only those companies with commercial premises with a rate-able value of more than £55,000 would be liable to help shoulder the cost, with the Mayor hoping to raise £4.1bn for the project.

Johnson said: "I understand that in these difficult times the additional business rate will be a greater burden to our smaller businesses.

“Our final proposals now set the right balance by exempting a further 4,000 of those firms that initially faced a disproportionate burden to those larger organisations in the centre, the West End and the financial districts that will benefit significantly from Crossrail and should therefore pay the greatest share of the construction costs."

Almost 70% of the cost will be borne by those businesses located in central boroughs - which will be served by Crossrail stations - with outer London boroughs contributing the least. Those liable will have to pay the business rate supplement for up to 31 years.