SHIP WELCOMES PASSING OF PRIMARY LEGISLATION ON REGULATION OF HOME REVERSIONS
SHIP today welcomed the news that the government has taken another step towards the introduction of formal regulation for home reversion schemes. The third reading of the Bill has been completed today and means Royal Assent could possibly be granted by the end of the year, enabling an acceleration of the consultation process.The final consultation process should therefore be completed some point in the third quarter 2006 with formal regulation in place early 2007.
As the leading authoritative voice for the equity release, representing over 90% of the market by volume, SHIP has been campaigning for two years to bring the sale of home reversions under the regulation of the FSA.The government announced in 2003 their intention to regulate the sale of lifetime mortgages, but at that time, intended to exclude home reversions from this. SHIP felt this would result in an uneven market and limit consumer choice and professional advisers would not be able to make a fair comparison between home reversions and lifetime mortgages.
To bridge the gap ahead of formal regulation, SHIP has taken steps to enhance consumer protection in a way that mirrors lifetime mortgage requirements.These include the establishment of an independent Complaints Board, able to issue fines of up to £25,000 per case and a Product Confirmation letter designed to give peace of mind to the consumer.The new regulatory regime will mean an end to the two tier reversion market where SHIP members were held to certain product and selling standards because of the SHIP code but non-members were under no such obligation.
Jon King, Chairman of SHIP commented:
“We are delighted at the progress being made towards bringing home reversions under the regulatory umbrella of the FSA. SHIP has consistently argued for home reversions to be put on the same footing as lifetime mortgages and we are pleased to have been able to contribute to the shaping of the new regulation. Recent figures from SHIP show home reversions business growing strongly and so the need to raise standards of consumer protection is greater than ever.”
EndsFor further information, please contact:
Laura O’Connell/Fiona Chow/Emma Bowden The Wriglesworth Consultancy Phone: 0207 845 7900
Jon King SHIP Chairman Phone: 02920 371725
Graeme Marshall SHIP Chairman, Home Reversions Board Phone: 07798 936048
Notes to Editors:
About SHIP:
Safe Home Income Plans (SHIP) is the UK’s leading professional body for equity release product providers, representing the interests of its 19 members who provide home income and equity release plans. It was launched in 1991 to promote safe schemes.At present, 90% of the equity release market (in volume terms) is represented by SHIP members.
SHIP’s current 18 members* are: Bridgewater Equity Release, Bristol and West Mortgages, Ecclesiastical Life, GE Life, Hodge Equity Release, Home & Capital Trust, In Retirement Services, Just Retirement, Key Retirement Solutions, Mortgage Express, National Counties Building Society, New Life Mortgages, Northern Rock, Norwich Union, Portman Building Society, Prudential, Standard Life, Stroud and Swindon Building Society.