The passing of the primary legislation means Royal Assent could be granted by the end of the year which could result in formal regulation of home reversions by early 2007.
Jon King, chairman of Safe Home Income Plans (SHIP), said it had campaigned for two years to bring the sale of home reversions under the regulation of the FSA and felt original intentions to regulate the lifetime mortgage sector alone would result in an uneven market.
“We’re delighted at the progress being made towards bringing home reversions under the regulatory umbrella of the FSA. Our recent figures show reversions business is growing strongly and so the need to raise standards of consumer protection is greater than ever,” King added.
SHIP has established an independent Complaints Board to bridge the gap ahead of formal regulation and enhance consumer protection in a way that mirrors lifetime mortgage requirements. A product confirmation letter has also been designed to give consumers peace-of-mind.
Dean Mirfin, business devel-opment director at Key Retire-ment Solutions, commented: “This move will help to ensure all consumers who choose to use equity release will receive an equal amount of protection and support from the FSA.” He added that the widening perception of a slowing housing market meant reversions would be more attractive.
Mirfin said: “Home reversion products currently account for only 5 per cent of the total value of equity release plans sold. With this potential growth and in order to build consumer confidence in the industry we fully support the government’s attempts to implement these changes in a smooth and timely manner which complements existing mortgage regulation.”
