The Equity Release Council, a key body in the UK housing finance market, has announced a significant update to its standards and is embarking on an extensive review to enhance consumer protections for those looking to access their home equity. This move promises greater confidence and security for homeowners considering equity release as a financial option in their later years.
In a proactive step to foster growth and trust in the equity release market, the Equity Release Council is refining its consumer protection standards. Michelle Highman, the chair of the Council’s Standards Committee, said, “The Council’s standards have been vital to the development of a vibrant market, but it is important that we regularly review them and consider how we best serve customers as well as support innovation within this sector. The Council is therefore undertaking a thorough review in 2024 with input from members, stakeholders, and other interested parties. The evolution of our standards is key to helping the market continue to grow and ensure that the diverse customers who choose to access their housing equity can do so with confidence.”
Key Updates and Future Plans
The Council’s recent announcement includes immediate updates effective from March 1, 2024, focusing on product flexibility and informed consumer choice. Notably, these updates introduce new standards for mandatory payment lifetime mortgages, providing enhanced protections for customers. This change aims to give homeowners peace of mind by offering more options to manage their finances effectively.
Additionally, the standards now mandate that financial advisers must consider a customer’s income and expenditure during the advice process. This requirement ensures a holistic approach to financial planning, encouraging discussions on alternatives to equity release and promoting responsible borrowing.
A Vision for Innovation and Protection
The Equity Release Council is not stopping here. With a broader review planned for later in 2024, the Council is inviting input from its members, stakeholders, and the wider industry. This comprehensive refresh aims to address not only the standards themselves but also how they are communicated to consumers, ensuring the highest level of protection and transparency.
Kelly Melville-Kelly, the Council’s director of risk, policy, and compliance, commented, “As a market, we have seen significant innovation and change over the last few years, and it is vitally important that we ensure our standards continue to evolve. The updates that we have announced today are just a start and we will shortly be launching a wider review and seeking input from members as well as wider industry stakeholders. This will be a wide-ranging refresh which will look at not only the standards themselves but how they are communicated to customers to ensure that they provide the best protection possible.”