An announcement in the Queen’s speech at the opening of Parliament, home reversion is to be regulated by the Financial Services Authority, after it was left out of the original plans for mortgage regulation. Last year the Treasury announced that it was looking at implementing legislation on home reversion although no firm plans were ever put into place.
Legislation is due to be passed within 18 months, but it could take up to three years for regulation to be fully implemented by the Financial Services Authority. However, the FSA appear to be giving out vibes that it could be sooner rather than later.
Home reversion accounts for around 3.5% of the equity release market, though a rise to 10% is predicted by the end of this year.
The sooner Home Reversion is regulated the better.