This follows frequent calls from the industry over the need for equity release clients to be given the same protection as other consumers.
Jon King, chairman of SHIP (Safe Home Income Plans) – the trade body that represents 90 per cent of the sector, said: “I’m delighted the decision to implement legislation for home reversion schemes has come so soon.
“The legislation will mean that all equity release products will be offered within the same market framework and provide the same consumer protection. Consumers should feel safe that these schemes are worth considering.”
Mark Kelly, director of Norwich Union Personal Finance, commented: “We have lobbied hard for the regulation of reversion plans and believe it is vital to create a level playing field between reversion and lifetime mortgages.
“Our research of 80 IFAs indicated the vast majority (89 per cent) also believed reversion plans should be regulated.”
Dean Mirfin, business development director at Key Retirement Solutions, said although home reversion products currently only account for 5 per cent of the total value of equity release plans sold, the widening perception that the housing market is slowing means their relative attraction is likely to increase.
“With this potential growth and in order to build consumer confidence in the industry, we urge the government to implement these changes quickly in order to bring the entire equity release industry under one regulatory regime,” Mirfin said.
Rupert Pearce Gould, chairman of home reversion specialists Home & Capital Trust, said: “We now expect intermediaries to take an even keener interest in home reversions. These will now take their rightful place on an equal footing with lifetime mortgages.”
The Queen also announced that the government will introduce legislation to reform support for housing costs.
