Later this year, the FSA is planning to implement a full regulation regime for the sale-and-rent-back market, having brought in interim regulation last July.
With the property market at the stage in the economic cycle where rent-back arrangements are in higher demand, it is natural that the regulator would be acting now.
And with the October 2008 report from the Office of Fair Trading being less than complimentary about the industry, many industry figures have welcomed the new framework.
The equity release industry has been compared to the rent-back market, yet the two are different.
Equity release offers products to a largely different client group, with numerous guarantees embedded in the products to protect this group.
The FSA recognises this difference, and makes it clear on its MoneyMadeClear website, where rent-back is shown as not a type of equity release. Our own research shows that IFAs recognise the difference between the two products – 76% of them do not intend to advise on this area after regulation.
We are pleased that this message is being heard by the FSA.