One of the major criticisms of the relatively new sale and rent back schemes is that, up until now, they have not been regulated. But following the UK Government’s Office of Fair Trade’s (OFT) market research finding in October 2008 that "a sale and rent back transaction may be the best way forward", the Financial Services Authority (FSA) announced that regulations would be introduced during 2009 and finalised 2010.

As with all industries, a few unscrupulous operators have brought a bad name to the sell and rent back industry. Unfortunately this has impacted on companies who operate in a transparent and ethical manner.

Many reputable companies has offered sell to rent back, and buy back schemes to homeowners for more than two years. They have been in the property business since 2001. Testimonials on their web site pay testimony to their stringent business ethics.

In January 2009 twelve unscrupulous businesses offering sale and rent back services were forced by the OFT to change misleading advertisements or remove their web sites completely.

According to a press release issued by the OFT: "The OFT asked the firms to substantiate claims made in their adverts or change them - typical statements included that residents are able to live in properties for life after they have sold them, benefit from low rent or buy back their homes at any point."

You will find a list of the firms who agreed to stop operating or amend their publicity on the official OFT web site at http://www.oft.gov.uk/news/press/2009/96-09

"The unsubstantiated claims used by some sale and rent back firms have been particularly concerning since they were targeting consumers suffering financial difficulties and at risk of losing their homes," said Heather Clayton, OFT Senior Director of Consumer Protection. "We are pleased that these firms have agreed to change or remove their advertising."

Apart from finding that sale and rent back transaction had advantages for some people, the OFT market research project recommended that the FSA enforce consumer protection. This legislation was introduced in June 2010.

Apart from anything else, the regulations are ensuring that those companies offering sale and rent back schemes:

• have adequate resources to do so, and

• have the "fit and proper people" to do so,

You will find a full list of the other "systems and controls" as well as "conduct of business rules" on the FSA web site: www.fsa.gov.uk

At present there are more than 1000 businesses offering a range of sale and rent back schemes in the United Kingdom. According to the OFT, more than 50 000 people have taken advantage of these schemes.

Unfortunately the OFT is unable to give advice to consumers regarding reputable companies, nor will they get involved when it comes to resolving individual complaints. Their advice is for consumers to get independent advice from an organisation like a Citizens Advice Bureau before making a final decision whether to go the sell to rent back route or sell house quick schemes.