Regulation in the Equity Release Marketplace:
The Equity release market is regulated in part by the FSA who are now responsible for regulating all UK mortgage lending. This means that Life Mortgages are regulated by the FSA.
Home Reversion Schemes are not yet regulated by the Government, however the Government has stated that they will be regulated in the future. However, the equity release market is self regulated by the Governing Body, S.H.I.P. (Safe Home Income Plans). All members of SHIP agree to be governed by a code of practice. To read more about the code of practice see below.
S.H.I.P. (Safe Home Income Plans) Code of Practice, Governing the Equity Release Market.
1. The members of SHIP agree to provide fair, simple and complete presentation of their plans. The benefits, obligations, variables and limitations must be clearly set out in their literature, including all costs which the applicant has to bear in setting up the scheme, the position on moving, the tax situation and the effect of changes in house values.
2. The client's legal work will always be performed by the solicitor of his or her choice. In all cases, prior to the completion of the plan the solicitor will be provided with full details of the benefits the client will receive. The solicitor will be required to sign a certificate to the effect that the scheme has been explained to the client.
3. The SHIP certificate will clearly state the main cost to the householder's assets and estate e.g. how the loan amount will change or whether part or all of the property is being sold.
4. All SHIP plans carry a 'no negative equity' guarantee i.e. you will never owe more than the value of your home.
Reproduced courteousy of S.H.I.P.
Click the following link to see a list of S.H.I.P.'s members who are governed by SHIP's code of practice relating equity release schemes.