Equity release has been around since the 1960s but has only become regulated by the Financial Services Authority (FSA) in recent years.
Up until 2004 (for lifetime mortgages) and 2007 (for home reversion plans) the market was subject to voluntary regulation under a body known as Safe Home Income Plans (SHIP).
SHIP is an independent body funded by provider members which began in 1991. It represents the majority of the equity release market in terms of volume and its members include the leading providers of lifetime mortgages and home reversion plans. SHIP's purpose is to to increase awareness and understanding of how equity release works and the safeguards in place.
SHIP code of conduct All members of SHIP agree to abide by a code of conduct with the aim of protecting customers. The code of conduct specifies:
- All products must allow you to remain in your property for life, providing the property remains your main residence
- All products must be clear and simple in the way they are presented to you
- You have the right to move to another suitable property without any financial penalty
- All legal work associated with an equity release plan must be completed by a solicitor of your choice
- The costs of the equity release plan must be clearly stated to you, along with the potential impact on your estate
- You will never leave your estate with a debt that is more than your house is worth (the 'no negative equity' guarantee).
Useful links SHIP website
Money advice service