Stakeholder positions: The Council of Mortgage Lenders

 

The CML welcomes the measures brought forward within the Bill to regulate home reversion schemes through the FSA.  We have long argued that home reversion schemes need to be regulated to ensure a level playing field across the equity release market, matching the regulation of lifetime mortgages that took effect under the FSA mortgage regime from 31 October 2004.

 

We believe that if the Government had decided not to regulate home reversion schemes, there would be a significant risk of consumer detriment.  Consumers would be confused by the apparent regulatory double standard, and there would be a risk of skewing the market simply because of the regulatory differences.

 

Home reversion schemes and lifetime mortgages need to operate under a comparable system of regulation as soon as possible to safeguard consumer protection.  There are benefits for the industry too, as a robust system of regulation across the board will help to underpin confidence and growth in the market for equity release.

 

We also welcome the use of the Bill to bring Ijara products into the scope of the FSA.  However, we hope that Ijara products will be regulated as normal regulated mortgage contracts rather than as equity release products since that is what they are closest to and are not normally sold to older people.

 

For more information contact Michelle Vosper, Public Affairs Manager on 020 7440 2203 or email michelle.vosper@cml.org.uk