In response to a question from Mortgage Solutions at the FCA’s Mortgage Conference today, Linda Woodall acting director of supervision – retail and authorisations, said equity release growth has been slow but ‘that doesn’t mean take off the restraints,’ she said.
“Anyone considering such a move should do so advisedly, because it can be expensive, have an impact on benefits and tax and be less a regulatory issue overall than a family one,” said Woodall.
But I can’t see that this means loosening equity release regulation, she said.
“We need to look at it and stimulate consideration of whatever products could come before equity release that maybe don’t exist right now,” she added.
Mortgage technical specialist, Kathy Taylor, said equity release remained the product of last resort.
“There is a bigger rump of customers who for whatever reason are going to need a mortgage that extends into retirement. In the past before the MMR people could borrow 20 to 30 years into retirement. We need to think about what the solution is for these people.”
In the opening speech at the conference, the FCA’s director of strategy and competition, Chris Woolard said the UK and European equity release markets are relative minnows to the US at just 0.1% of total EU mortgage lending.
However, he said it remained unclear what the ‘market barriers’ are and suggested the reputation of the market could have reduced the ‘number of firms and customers willing to engage in it.’
He asked: “Does regulation need to adjust to foster more of a market in areas like equity release, whilst still protecting consumers?”
