The equity release industry has changed dramatically since the Financial Services Authority (FSA) now the Financial Conduct Authority (FCA) regulated the equity release market in 2007. Below is a brief history of how the equity release market has developed since the mid 60’s.
- First plans were released in 1965
- The 1980s and 90’s were the troubled years for Home Improvement plans. Rising interest rates plus falling house prices resulted in negative equity for some
- The need for consumer protection led to the formation of Safe Home Income Plans (SHIP) in 1991, which set down various product safeguards such as the “no negative equity guarantee” meaning the customer will never owe more than their home is worth and no debt will ever be left to the estate.
- In 2012 SHIP was re-launched as the Equity Release Council, broadening its membership from providers only, to include; advisers, solicitors and surveyors ensuring equity release products continued to be safe and reliable for consumers. ERS as members of the Equity Release Council, are required to offer products and services which conform to the best practices of the sector meaning customers like you are kept fully informed and increasingly protected
- 2000’s: with a changing market and FSA (now FCA) improves regulations, more SHIP products became available to the consumer, providing a safe and easy way to release equity fro their homes
- £1.38 billion of equity release loans were made in 2014 – this was the largest amount of equity release lending ever recorded*
- 77% of home owners believe their home is their biggest financial asset in retirement (research carried out in December 2013 with 1511 homeowners aged 55 and over)*
- Over 60’s have nearly £1.3 trillion of equity in their houses (Top of the Ladder Housing report by DEMOS)
- *Source: Equity Release Council