The government has responded to the consultation on the definition of home reversion plans in a document summarisng responses published by the Treasury.
The Financial Services and Markets Act definition will be drafted to include home reversion schemes, Ijara home finance products, flexible tenure products and will not include an age limit or a de minimis threshold.
The government also received responses saying that the definition of home reversions should be as inclusive as possible and that regulation should be designed with potential social products provided by non-profit organisations in mind.
There were also calls for the Treasury to make clear the timetable for bringing home reversions into regulation and for progress to be rapid in order to minimise the potential for market distortions to arise.
The Association of British Insurers has welcomed the government’s commitment to legislate for the regulation of home reversion plans, but has underlined the need for urgent action.
Helen McCarthy, ABI policy adviser, says: “Together with a coalition of interested organisations, we have been pressing the government to speed up its plans to regulate home reversion plans as a matter of urgency.
“The sooner the government brings in legislation, the sooner the FSA can start the process of developing detailed regulations for the sector.
“Equity release is an important element of the larger retirement picture. Regulation of home reversion plans will ensure there is a level playing field with lifetime mortgage products, which already come within FSA regulation and ensure that there is protection for the consumer across the whole of the equity release market.”