Home › News › Is Sale and Rent Back Regulated in the UK? A Guide
Yes, in most cases. Sale and rent back agreements that fit the legal definition are regulated by the Financial Conduct Authority (FCA). Any firm that arranges, advises on or provides one needs FCA authorisation, and it must follow specific conduct rules. As of October 2026, the safest step is to check the firm on the FCA register before you agree to anything.
Not every arrangement is covered, and some firms have been operating without permission. This guide explains what the rules mean for you, how to check a provider and what to watch out for.
What is sale and rent back?
You sell your home but stay in it as a tenant. The arrangement lets you release money tied up in your property while you keep living there. The price you receive may be below the open-market value, and the rent you pay can be a significant monthly cost. Both points matter when you judge whether the deal is fair.
When is it a regulated agreement?
The FCA’s Handbook guidance on regulated sale and rent back agreements sets out the test. In broad terms, an agreement is likely to be regulated when:
- the seller is an individual, or a trust where an individual is the beneficiary
- the seller, or a related person, keeps the right to use at least 40% of the land as a dwelling
- the land is in the UK and is not used mainly for business
- the home is not let as a dwelling to someone outside the seller’s family or related circle
Related people include a spouse, civil partner, long-term partner, parent, child, grandparent, grandchild or sibling. The definition has detail beyond this summary, so a regulated adviser or a solicitor should confirm how it applies to your case.
Regulated activities include entering into the agreement, arranging it, administering it (for example, collecting payments) and advising on whether to go ahead. A firm doing any of these needs the right authorisation.
What the FCA rules require
Since 26 April 2014, firms offering these agreements have had to follow conduct rules set out in the FCA Handbook (MCOB 4.11). In practice, a firm must:
- Explain its role and pay. It must say, in writing and out loud, what service it offers, what capacity it acts in and how much it will receive and when. If it does not know the exact figures, it should estimate them.
- Give you the MoneyHelper factsheet. Once you show interest, the firm must provide this free guidance and, under FCA guidance, explain it to you face to face.
- Give advice before you commit. You should not be bound to an agreement unless an authorised firm with advice permission has advised you to enter it.
- Check the deal is suitable. The firm must be satisfied that you can afford the payments and that the agreement fits your circumstances. It must not rely materially on the money from the sale to prove affordability.
- Test whether it is appropriate. The firm should look at whether a sale below value is right for you, whether you are in financial difficulty, whether you have explored other options and whether an open-market sale would be better.
- Keep records. Files must be kept for at least five years.
These rules matter because they set a minimum standard. A firm that skips them is a warning sign in itself.
What went wrong in a recent case
In March 2026, the FCA reported that a man had been jailed for two and a half years for running a sale and rent back scheme without FCA authorisation. The FCA said he targeted people in financial difficulty, promised a quick sale and a right to stay in the home, and encouraged victims to sell below market value. He charged excessive and hidden fees that the FCA put at £925,233 in total. Some victims were evicted.
Two other people were also dealt with by the courts in relation to the same business. The FCA has started proceedings to recover the proceeds of the offences, with the aim of compensating victims.
The FCA’s advice to anyone considering this kind of deal is simple. Check the provider is authorised before you go further.
Warning signs to watch for
Be cautious if a provider:
- cannot give you a firm name and FCA reference number, or is not on the FCA register
- pushes you to sign quickly
- gives vague promises about staying in your home for as long as you like
- suggests a low sale price without asking whether you have tried other options
- explains its fees late, or only in general terms
- tells you not to speak to family, a solicitor, an adviser or the regulator
Any one of these does not prove a firm is dishonest. Several together are a reason to stop and get independent advice.
How to check a firm
- Ask for the full name and address of the company, and the name of the adviser you are dealing with.
- Search the FCA Firm Checker to confirm the firm is authorised and check it has permission for the activity it offers. Check the adviser too, not only the company.
- Ask for the fee disclosure in writing, and make sure it matches what you were told.
- Ask for the MoneyHelper factsheet and read it before you sign.
- Speak to an independent solicitor who is not connected to the provider.
Questions to ask before you sign
- What exactly am I selling, and what price am I getting?
- How much will I pay in rent, and how and when can it rise?
- What fees will I pay, and who pays them?
- What happens if I fall behind on the rent?
- What are my options if I want to buy the home back later?
- Why is this better than an open-market sale, or a loan?
If the answers are vague, that tells you something.
Compare it with other options
Before you agree to a sale and rent back, consider the alternatives. These can include a standard sale, a lifetime mortgage, a loan from family, or help from a debt adviser if money is tight. Get at least one valuation so you know the likely open-market price. Then compare the total cost of the deal over the years you expect to stay, not just the lump sum you receive today.
Many people are surprised by how much the rent and fees add up to over time. Work out the figures with a calculator or an adviser before you commit.
Key points
- Many sale and rent back agreements in the UK are regulated by the FCA.
- The firm and the adviser should both be authorised. Check them on the FCA Firm Checker.
- FCA rules require clear disclosure of fees, a MoneyHelper factsheet, suitability and affordability checks, and record keeping.
- Be wary of pressure, vague promises, unclear fees and any request to keep the deal quiet.
- Get independent legal and financial advice before you sign.
Frequently asked questions
Is sale and rent back legal in the UK? Yes, it can be, but it is a regulated activity. The provider and the adviser must be authorised by the FCA, and the deal must follow the FCA’s conduct rules.
Do I need a solicitor? It is sensible to get independent legal advice before signing. The solicitor should not be recommended by the provider.
Can I lose my home? Yes. Some victims of the 2026 case were evicted. Before you sign, work out whether you can afford the rent over the long term, including future increases.
What is the MoneyHelper factsheet? It is free guidance on sale and rent back, which the FCA rules require firms to give you. You should read it, and ask the firm to explain anything you do not understand.
How do I know if a firm is authorised? Use the FCA Firm Checker. Check the company and the individual adviser. If a firm cannot give you details, do not go ahead.
What should I do if I have already signed with an unauthorised firm? Get independent legal advice as soon as possible. You can also report your concerns to the FCA.
This article is general information, not financial or legal advice. For your own situation, speak to a qualified solicitor or a regulated financial adviser.