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Government regulation coming to home loan reversion

13 December 2004
Home reversion schemes, where homeowners give up a percentage of their property in return for a lump sum, could fall under Government regulation in the next few weeks, insiders have revealed.

Helen McCarthy, a policy adviser at the Association of British Insurers (ABI), has said she thinks the Treasury might go as far as introducing legislation this week.

Home loan reversion schemes are seen in some quarters as controversial as they are seen as overly complicated and offering poor value.

Elderly groups in particular have said the sector remaining unregulated might let a cowboy element enter the market and exploit vulnerable pensioners, amongst whom the schemes are most popular.

Ms McCarthy has commented that ministers are now coming under pressure from industry groups to bring in legislation, which might allow full scale regulation by the Financial Services Authority (FSA).

"Because of the short parliamentary session, if they are going to do something, they have to do it soon," she concluded.

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