In a report by Safe Homes Income Plans group in 2006, reversion plans were the only schemes to see growth in the equity release sector, up almost 35% on 2005 and accounting for 73m worth of business.
On April 6, the Financial Services Authority will demand that all brokers selling home reversion products be regulated.
After that date, unless a broker is registered with the FSA to specifically sell home reversions, they can only be labelled a lifetime mortgage broker, rather than an equity release broker.
Peter Couch, managing director of Bridgewater, thinks this move will be a tipping point for the sector, with growth of 10% within two years and 20% in 10 years.
Couch says: “We think once we see home reversions take 10% of the equity release market, that will be the tipping point for the sector.
“We have spoken to brokers who agree that home reversion is the right choice for one in five customers. We are confident that reversion will account for 20% of the market in 10 years.”
Dean Mirfin, business development director at Key Retirement Solutions, says: “I think the 10% prediction is fair, but the key to increasing penetration in the equity release market is innovation.
“It will be interesting to see how home reversion products change in the next few years as in the past they have been behind the innovation curve in the lifetime sector. If they can change in that respect, the sector can grow.”