A Labour MP is calling for the Government to take action to regulate all areas of equity release, including home reversion, to head off a “huge” misselling scandal.
Barry Gardiner will raise his concerns over the “exponential growth” in selling in this area of the mortgage market with Treasury
financial secretary Ruth Kelly at an adjournment debate this week.
Rapid growth in sales of home-reversion plans has pushed the Treasury to consult on whether the sector should be regulated. It is also looking at the wider equity-release market and the potential impact of regulation.
But Gardiner wants to see a tougher stance from the Government, with more advice provided for people who are considering using their property as a substitute for a pension fund. He wants the Department for Work and Pensions to research how many people are considering using equity release to fund their retirement.
Gardiner says: “The current plans for the regulation of
equity-release products will create confusion and will allow
disreputable companies to take advantage of the regulatory loopholes.
Unless we have a clear, unambiguous and simple regulatory structure, we run the risk of a misselling scandal on a par with the endowment crisis.”