Home reversion plans are to be regulated by the Financial Services Authority, the government has announced.
Under these schemes, a percentage of a homeowners' property is sold to a reversion company for a cash lump sum. On the homeowner's death, the house is sold and the company keeps this percentage as well as the proportionate equity increase.
The FSA have said that although they are seeking urgent action on this matter, it could take between two and three years to come into force.
Our view
Excellent news, this special type of equity release scheme should have been included when mortgages became related but at least it now will be.