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Not sure how the security of tenure can be guaranteeed if the buyers have sourced borrowed funds of some sort - then dont repay. However, thats for the FSA to sort out.

Theres a danger of the FSA becoming so strict and rigid that there are either hardly any, or even no, operators eventually. This would only put increased pressure on local authorities to rehouse those who get evicted (the majority of SARB clients are in danger of repo) because they cant find a rescuer.

The leaflet advertising isnt a big issue because there are other ways to get your message across. Most of the big operators rely on newspaper ads etc already - so it wont be a big thing there. I advertise for SARBS in my local papers and pass leads on - so no change there.

As with any industry, if any changes are general ones to all then its not a problem - if the market size remains, at least, the same - operators have to find different ways of reaching their market - and the most creative prosper from that change. In my opinion the SARB market potential can only get bigger over time - but it looks like those who need it may not be able to find a company to help them when they need it! This is the irony of the FSA changes that have probably been too heavy handed. I saw in an article last Spring (prior to the FSA intervention) that the FSA themselves estimated that only 2% of SARB arrangemetns went wrong for tenats after the deal was struck - meaning 98% didnt!

Not many industries have a 98% customer satisfaction record. In 5 years the stats will probably be the same for the regulated firms..theres no way that ALL deals will go perfectly for tenants. At least before - the risk was spread via lots of small operators. if a massive SARB organisation 'goes under' then it could be carnage for many tenants. Interesting times ahead.

Reforms were needed but this was a sledgehammer to crack a nut. The FSA wont be here soon if (when|) the Tories get in......cue another opportunity for interferance from dull, grey men and women in nice striped suits!

the legislation all comes from the financial services/legal industry feeling that others (us) are taking their customers and their business away

legal advisors make fortunes from repossssions and financial firms want us removed as they have their own sell and rent back deals they have run for years.

we were never going to win this, despite great efforts by some. The chief protagonists just have too much clout to overcome. This legislation (all of SARB)  had nothing to do with protecting the consumer and everything to so with them protecting their interests. Given the power they wield over government and ministers, *ahem* all those juicy post polictical career apointments with financial firms, we had no prospect of being allowed to continue SARB due to legislation.... the 5 year thing has all but destroyed it for us..... but wait.... lets think..... who can operate within these new rules......hhhmmmm see if you can work it out!

i presume that i can still advertise for property with leaflets just not SARB?

Rik

I agree with the sentiment that the "establishment" is trying to push out SRB investors.  I have heard this from many sources.  There's also the issue of the UK rapidly becoming a Nanny State!

On a positive note, the new FSA Regs will be great news for Joe Public, and for SRB firms like the one I'm associated with who already trade in this responsible manner.......  if, and only if a sufficient number of firms are allowed to pass through the FSA authorisation process.

Sadly, though, the Full Regime will surely see the number of SRB providers drop even further. The smaller firms will struggle to meet the new capital adequacy requirements and the extensive compliancy/audit systems required. The Interim Regime was tough, but the Full Regime is hugely tougher.

Rialto questioned the matter of security of tenure.  The FSA's solution is very simple... (1) each authorised firm will be required to hold a large pot of funds (capital adequacy)...  around £200k for a medium sized firm, and; (2) the FSA will require that the "mortgage" lender accepts the security of tenure.  In one fell swoop the FSA will wipe out the use of BTL mortgages by SRB firms.

Fortunately my firm, via it's associate, is one of the few intending to continue to operate under the Full Regime, which means that we will be able to continue to accept SRB leads from fellow property investors (quick plug: we're always looking for SRB and non-SRB leads!).

Rik asked about use of leaflets for non-SRB....  the OFT are currently plotting an assault on all "sell your house quick" operators, and on all forms of advertising (not just leaflets).    The Estate Agents Act is already being tested as the mechanism to achieving this - in that the OFT are already claiming that "sell your house fast" is caught within this.  The Act is due to be updated later this year - when it may require all advertisers to become registered Estate Agents and have additional certification/qualifications when dealing with vulnerable customers.

On this subject of advertising... 

(1) I can offer a safe solution to you for SRB.   My firm already offers "licensing" for the likes of you, Rik, to legitimately advertise for SRB within your adverts (including leaflets up until 30th June) on the condition that SRB leads are passed exclusively to us in return for an introducer fee.  You won't get to own the property yourself, but you can benefit from the fact that because there are so few SRB operators you will enjoy a large response and hopefully earn lots of finder fees!

(2) If the OFT puts the dampers on non-SRB advertising too, we will be offering a solution whereby, for a small commission, we will "license" your advertising and "wrap" your cases such that you can continue to advertise and buy properties yourself.

Best regards,
Alan

that does sound far more positive,

i asked becuse i thought that the whole advertising for property was under scrutiny, do we know why advertising for property has been singled out as opposed to any other 'i will buy your xxxxxxx' operator? Be it:

cars, gold, mobile phones, caravans, national or local firms

i mainly did SARB and bought an equal number of complete wrecks (for renovation) on the back of advertising, i don't see what is trying to be protected by someone with a complete wreck of a property selling it to someone who advertises that they will buy it.... i don't really see what the problem is.

if your business is renovating wrecks you need your raw material from somewhere? What is wrong with advertising for raw material

Rik

Why was SARB singled out?....  I think you had already hit the nail on the head, Rik... us SARB investors were treading on too many toes!

SHIP (equity release) - probably lobbied against us because we were winning business away from their members

SHELTER - lobbied for us to be FSA Authorised and, now that we are FSA Authorised, are still saying that SARB is bad.  I'm guessing that despite being a charitable organisation their employees were at risk of being made redundant by the SARB sector!

CAB - have always hated SARB, and seem to prefer IVA's (which, in my opinion and experience, are far more damaging to the average SARB candidate).  They invested a lot of time training staff up on IVA's - and I've even heard (unsubstantiated) rumours that the IVA companies make charitable donations to CAB!   We have some experience of SARB cases where the CAB have got involved, and it makes my teeth itch.

Best regards,
Alan

If they regulate all forms of advertising then the type of solutuion Alan offers will mean that, ironically, it should make life better for investors who get involved because LOTS of negative and deflated investors will leave the arena - meaning less competition.

These things happen in business and have done for years - there is always a way around things for creative minds. Shake-ups in industry quite often end up being more beneficial than previoulsy for those who are switched on.

Nice observation Alan about Shelter losing their stock-in-trade (distressed families to care for, and therefore Shelter employees possibly losing their Shelter jobs eventually) if lots of people continued to be rescued from the threat of repo by the 98% who did it right. Its in their interest to have a housing problem and homeless families. In the same way Tesco need people to become hungry. No homeless people = no Shelter.

Ive just re-read those last 2 lines and it does seem rather cynical perhaps?....good,I better not edit it then.