Nationwide fails to win support on CAT issue

The Council of Mortgage Lenders and equity release groups have dismissed Nationwide&#39s calls for lifetime mortgages to be covered by government CAT standards.

Nationwide – which doesn&#39t currently offer equity release – insists the move would reassure potential customers and stimulate market growth.

Philip Williamson, chief executive at Nationwide, is behind a campaign to define a new CAT standard.

Jennifer Stoddart, senior press officer at Nationwide, says: “It is in the industry&#39s and consumers&#39 interests to have greater guidance and we believe a CAT standard should be specifically defined for equity release products.”

But other parts of the industry say existing safeguards are adequate, and that premature product standards could stall growth in the equity release market – currently estimated to be worth only one hundredth of it&#39s potential value.

Bernard Clarke, communications manager at the CML, told Mortgage Strategy: “CAT standards might be over-prescriptive at this stage, but we would support them if it became clear they would be broadly welcomed by consumers.”

The Safe Home Income Plan group has required providers to offer “fair, simple and full” mortgage explanations since 1991, and says CAT standards are unnecessary.

John King, chairman of SHIP, says: “We don&#39t think there is a need for a CAT standard. Experience in the standard mortgage market shows the number of providers that choose to offer CAT standards is small. 90% of the equity release market is covered by lenders who adhere to the SHIP code, which shows how successful it is in offering minimum product standards.”