As the Government has now agreed to allow home reversion schemes to fall under the remit of the industry regulator, the Financial Services Authority, the Treasury is currently consulting on the process prior to regulation. The first consultation is to define what exactly a home reversion scheme is and how it works. The responses to the consultation must be back with the Treasury by the end of September this year. It seems that the process will be long and drawn out.
Our View
Equity release schemes will become regulated with effect from 31 October 2004, along with mortgages. Whilst the regulation is positive news for consumers, those taking out home reversion schemes will have to wait for another couple of years for regulation, which we believe is wrong. We do understand that much less can go wrong with home reversion schemes than equity release schemes, but they both should have come under the regulations at the same time. Splitting the regulation dates will only confuse consumers, thinking that they are protected by buying a regulated contract, when in fact they are not.
Take advice on which equity release or home reversion scheme is best for you.