The Code is aimed at providing consumers with protection and confidence in the market before it is finally regulated after the next election. It includes the threat of a £25,000 fine or expulsion from the body for firms who are judged to have transgressed the rules.
Under the rules it is the lender that is ultimately responsible for ensuring compliance.
The new rules will be enforced by, what SHIP believes is, a heavyweight board. Members include John Hill, chairman of the Institute of Actuaries, who will chair the SHIP Complaints Board and Paul Smee, currently director-general of AIFA.
Chairman of SHIP John King commented: “The Code of practice has been designed to bridge the gap until FSA regulation is introduced and we firmly believe that it will give great confidence in home reversions to both consumers and brokers.”
Colin Taylor, managing director of Key Retirement Solutions, which accounts for 20 per cent of SHIP intermediary equity release business, commented: “In the lead up to regulation of home reversion by the FSA, the Code will strengthen consumer confidence by providing a more robust, tough advice and sales process which complements mortgage regulation.”
Roger Hillier, product development manager at Mortgage Express, said the code was a “move in the right direction” for home reversion and that Mortgage Express was considering entering the market, following last year’s equity release launch. “It’s good to have the SHIP Code to protect the sale of home reversion schemes in the run up to regulation,” he said:
