News
The Financial Services Authority (FSA) has closed the sale-and-rent-back markets temporarily due to widespread poor practice.
The FSA found that most sale-and-rent-back products, sometimes called sale and leaseback, were either unaffordable or unsuitable and should never have been sold in the first place. The decision came after a year-long review of 22 firms.
Sale-and-rent-back transactions allow struggling property owners to stay in their own homes, by selling them to a company at a discount price. The company then rents it back to them at market rate.
The most common failings found in the review included poor assessment of appropriateness and affordability, bad ordering and timing of disclosure and inadequate record keeping. The FSA also highlighted incorrect information in the rent-back agreements, financial promotions that broke FSA rules, and badly structured sales processes that did not give customers enough time.
A study by Which? In February last year criticised the advice given to sale-and-rent-back customers as ‘woefully inadequate’.
Not in the interest of the homeowner
As I recently commented in the Financial Adviser, the main problem with sale-and-rent-back is that homeowners’ interests are left far behind. A product that should have helped vulnerable households often ended up stinging them. They should have been treated better by the firms involved, but most sale-and-rent-back companies just sell the properties on to maximise their own interests.
The closure of the markets is a good move in that it will protect desperate households from being affected by a product that is not designed in their interests.
If you need any more information about the closure of sale-and-rent-backs, or advice about what to do in your financial situation, don’t hesitate to call us.
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This month sees the Chinese new year arrive: the year of the dragon. What can we expect? What will the year bring?
Is it all about the London Olympics and Wimbledon in the summer for the feel-good factor?
Or about continued low interest rates? Will the Eurozone stabilise? Will there be a double dip global recession?
Who really knows? At Limetree, whatever the market brings to us in 2012, we are ready, willing and able to achieve the high standards of advice and service we offered last year!
If you are a first-time buyer or mover, or are looking to remortgage, we aim to help as much as we can. Why not start the year by giving us a call?
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In summary:
- UK gilts have been the best performing asset class of the last quarter but corporate bonds now offer attractive value.
- We have raised 6% cash ahead of the outcome of the eurozone policymakers’ deliberations in case a deal falls through.
- Alternative investments have provided excellent protection against the volatility of equity markets.
- Our Deposit Alternative portfolio continues to be a safe haven for those concerned about future market turbulence.
Download the full Investment Prospects October 2011
Prospect Wealth Management brings the highest standards of professional investment management to the individual investor, charities and trusts.
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Limetree Financial Services was created by the merger of two former companies – TuckerGardner Financial Services and BF Mortgage Brokers – headed by James Hammond along with fellow advisors Andrew Beer and Alex Pangratiou who have a combined total of over 60 years’ experience within the financial services industry in Cambridge.
We have a passion for mortgages and the associated services and a desire to find the appropriate solution based on your individual circumstances. As whole-of-market independent brokers of mortgages, life insurance and buildings and contents insurance, we feel we offer a unique proposition with no outside influence from estate agents, restrictive panels of lenders or a corporate mentality.
It’s a more personal service. We just call it as we see it.
Sukh Singh has recently joined the Limetree team as General Insurance Manager (he’ll be on the website soon). Sukh is able to trawl the market to look for the most appropriate policy for each client’s needs, whether it is for a one bedroom flat or a multi-million pound mansion.
Our head office and administration centre is based in Histon, which provides free parking for clients. Alternatively, home appointments are available. The admin unit is run by Sian Hammond who, following the family feel, is ably assisted by Tracy Beer. Maxine Searle has also recently joined the company. We use a state-of-the-art back office system to help all transactions run as smoothly as possible.
That’s us – contact us if you need any advice.
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In summary:
- Threat of Euro break-up recedes for time being as ECB spends €22bn buying Italian and Spanish bonds.
- US pledge to hold interest rates at close to zero until 2013.
- Japan recovering faster than expected with growth in second quarter down by just 0.3%.
- Stock market valuations cheap in Europe and Japan.
Download the full Investment Prospects August 2011
Prospect Wealth Management brings the highest standards of professional investment management to the individual investor, charities and trusts.
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