Home reversion rules published
The Financial Services Authority (FSA) has published the final rules for the regulation of home reversion plans and Islamic law compliant home purchase plans, which it is to regulate from next year. The rules have been formulated after consultation and are designed to ensure that anyone taking out either of these sale and lease plans enjoys consumer protection similar to that enjoyed by consumers taking out lifetime or conventional mortgages.
The plans will be regulated by the FSA from 6 April 2007, following recent parliamentary approval of the legislation. The FSA will be able to accept authorisation applications for these home finance products from 6 November.
The FSA’s director of retail policy Dan Waters said: ‘Regulation of these sale and lease arrangements introduces important new protections for consumers in the housing market. It will help older consumers looking to release equity from their homes by extending protection over both sectors of the equity release market. It will also ensure fairer treatment for consumers wanting to buy their homes in way that is compliant with Islamic law, building on the work that we have already done in the field of Islamic financial services to improve consumer access to these products.’
He added that firms needed to be sure that they were fully prepared as regulation was only five months away. Consumers will be able to be sure that firms which offer these products are adequately resourced with competent staff. They will also get clear information about services so they can make informed choices.