HBOS retail chief executive Benny Higgins says the group has no plans to offer equity release and questioned whether the market could handle a challenge from the regulator.
Higgins, speaking at the CML conference, accepted that there was a demand but the right products have yet to be developed and he fears the borrower’s family members could trigger a regulatory backlash.
Earlier this year, HBOS said it was considering entering the equity-release market.
Higgins said: “We will continue to study equity release but we do not know how the industry can provide robust products. I would be anxious about how to tackle enforcement. There could be challenges from members of the family, not from who you sold the product to. It is not worth doing business that is not 100 per cent.”
Stonehaven chief executive Jayne Almond says: “A great deal has been done by the industry on product design and the sales process to improve the safety of the products. I am surprised by Benny’s comments.”
Higgins also asked whether Nationwide’s recent U-turn in not offering exactly the same products to new and existing customers could be a prelude to it launching a retention scheme similar to the scheme launched by Halifax and BM Solutions. Alliance & Leicester head of intermediary mortgages Mehrdad Yousefi also holds the same view.
Nationwide had previously confirmed it is considering launching a retention scheme. Its new policy of offering the same deal to new and existing customers only if they both fall into one of its two product ranges is similar to Halifax’s retention products.
Higgins said: “The Nationwide changes sound as though it is heading in that direction.”