Mortgage providers have criticised delays in the publication of the Treasury's consultation paper on home reversion plans.
The document will enable the government to poll the industry as to the suitability of home reversion schemes falling under the regulatory umbrella.
Although Norwich Union welcomes the steps taken by the Treasury it says that, with a response not due until next February, there is likely to be a long period before regulation is put in place.
Paul Stokes, head of equity release marketing at Norwich Union, says: “As lifetime mortgages will be regulated from October 2004 there will be a period where the consumer is afforded different levels of protection depending on the product they select.”
But the Treasury says the purpose of the paper is to enable the government to make an in-depth analysis of the costs and benefits of any regulation.
Ruth Kelly, financial secretary to the Treasury, says: “We are seeking information on the wider equity release market and any evidence of consumer detriment in the selling of reversion plans, as well as views on the possible impact of regulation.”
Norwich Union says that while it agrees there is no evidence yet of consumer detriment, it does not feel it appropriate to wait for such an issue to appear. Along with the Safe Home Income Plans group, it is working on a voluntary code of regulation similar in form to that which will apply to lifetime mortgages under FSA regulation.
Industry figures agree that the Treasury will regulate home reversion.
Tim Sturley, product development manager at Mortgages Express, says: “Reading between the lines it seems likely that, providing the Treasury can find an easy way of doing it, reversion plans will be regulated.”