Arranging deals in home finance transactions
Arranging deals in home finance transactions

The following Financial Services guidance note provides comprehensive and up to date legal information covering:

  • Arranging deals in home finance transactions
  • Background to the regulation of home finance transactions
  • Arranging (bringing about) home finance transactions
  • Making arrangements with a view to transactions occurring
  • MCD override
  • Exclusions

Background to the regulation of home finance transactions

The regulation of home finance transactions came about at different points in time. On 31 October 2004 (a date known as M Day), lenders and intermediaries of regulated mortgage contracts (RMCs) became regulated. The Regulation of Financial Services (Land Transactions) Act 2005 enabled the Financial Conduct Authority (FCA) and its predecessor, the Financial Services Authority, to regulate activities similar to those that were already regulated in relation to RMCs but which instead involve the provider acquiring land rather than simply providing finance for its purchase by the homeowner. An amendment order in 2006 (SI 2006/2383, which came into effect on 6 April 2007) brought within the remit of regulation home reversion plans (HRPs) as well as home purchase plans (HPPs). HRPs are schemes where a provider buys an interest in a homeowner's property and allows the homeowner to continue to reside in the property. HPPs include certain types of Islamic financing arrangements, such as Ijara or diminishing Musharaka. A further amendment order in 2009 (SI 2009/1342, which came into effect on 1 July 2009) brought in the regulation of sale and rent back agreements (SRBAs). SRBAs are schemes where a provider buys an interest in a homeowner's property and allows the homeowner, in return for payment of rent, to continue in