Mark King, managing director of Crown Equity Release, warned that pensioners should be cautious when considering sale and rent alternatives to equity release and that there were many unscrupulous firms targeting pensioners with valuable assets.
The concerns have not been limited to equity release, but include home owners struggling with repayments and facing repossession. King said that in a large number of cases the former home owners could be open to the threat of eviction in an unregulated area of the market.
He said: “If in retirement you are selling on reversion or mortgaging your home for financial reasons, then the last thing you will want to do is pay rent. Most elderly people take out a lifetime mortgage or a home reversion plan to raise capital and so an extra strain on their outgoings can leave many in a vulnerable position. Consumers should guard against the possibility of losing their homes and even facing eviction by seeking independent advice from a registered IFA and only dealing with Financial Service Authority (FSA) regulated buyers.”
Ray Boulger, senior technical manager for John Charcol, said: “There’s no possibility of the FSA regulating here unless its responsibilities are increased. We don’t want the government to regulate house sales. The concern is relevant, but it’s difficult to see how it could be monitored, let alone regulated.”
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