The decision follows a lengthy consultation process, during which SHIP presented the arguments for regulation. These were echoed by a number of trade associations, consumer bodies and product providers.
SHIP has publicly argued for Government adoption of regulation on home reversion schemes, as vital to ensure that consumers benefit from a fair choice of products and prevent unauthorised providers from entering the market.
SHIP believes the implementation of the new regulatory environment may take considerable time, so it today announces plans to introduce its own tough code of practice on home reversion schemes later this year to ensure best possible consumer protection continues in the interim.
Features of the new code will include:
· An effective complaints procedure
· New standards on product confirmation advice
· Tough penalties for non-compliant providers
SHIP has been an active consumer watchdog since its inception in 1991 and recently established two product boards - representing lifetime mortgage and home reversion plans - to work alongside regulators to lobby the Government in the rapidly expanding equity release market.
Jon King, Chairman of SHIP said: “We welcome HM Treasury’s decision to formally adopt regulation of home reversion plans.
“However, this is unlikely to take place for some time, and certainly not by October. The Treasury will now consult on the definition of home reversion plans, and when this is complete and the scope of regulation has been defined, the FSA will consult on the details of the regulatory regime. SHIP will introduce a tough new code of practice for reversion scheme providers very shortly.
“This will ensure the highest level of consumer protection for anyone wishing to purchase a home reversion scheme.”
