31 March 2007
SHIP WELCOMES THE REGULATION OF HOME REVERSIONS
Safe Home Income Plans (SHIP), the trade body representing over 90% of the equity release market today welcomed the official regulation of home reversion schemes for 6th April.
SHIP predicts that growth in the equity release market following regulation will be fuelled by increased interest amongst IFAs. Whilst IFAs have always been aware of home reversions many have concentrated advice on lifetime mortgages. With IFAs now obliged to advise on both products and with a standardised equity release arena it is hoped more IFAs will enter and boost the market towards the end of 2007.
Since the regulation of lifetime mortgages on M-Day 2004 SHIP has campaigned to extend regulation to home reversion products. The 6th April marks the official beginning of a level playing felid across the equity release market.
Of £1.1 billion of new business written by SHIP members in 2006, home reversion plans accounted for only 7% – a similar figure to the two previous years. However, the Institute of Actuaries forecast that the equity release market will reach £1.5 billion by the end of 2008 and the SHIP members’ survey 2006 predicted increasing growth from home reversions business.
Jon King, Chief Executive of SHIP commented:
“6th April represents a welcome result of SHIP’s long campaign for the regulation of home reversions. Since the regulation of lifetime mortgages in 2004, SHIP has pressed for a level equity release arena. In an attempt to bridge the gap prior to 6th April, SHIP also took its own steps to enhance consumer protection by establishing an independent Home Reversions Complaints Board and checklist.
“With a level playing felid across the equity release market it is also hoped that more IFAs will be encouraged to offer both lifetime mortgages and home reversions, ensuring full product choice for clients.”