The European Pensions and Property Asset Release Group (EPPARG) has launched a set of high-level standards on home reversion.

The standards, known as the ‘EPPARG 10’ on equity release products through the sale of real estate, have been developed by EPPARG, whose members and make up more than 75 per cent of the home equity release market in Europe.

The standards highlight that home reversion schemes shall be lifetime products, whereby upon the transfer of the ownership of their property, customers shall receive payment in the form of a one-off sum or a lifetime annuity, or a combination of both, and shall have a lifelong exclusive right of residence and right of use.

The standards make clear that ongoing maintenance shall be conducted by the owner of the property, while the customer must be granted the right to carry out any conversions that are necessary for the person to continue to live there.

Consumer protection is a key focus of the standards. In exceptional circumstances, where a customer needs to move to a different property, the owner will seek to offer a moving house option at reasonable costs, and there are also protections for consumers if the current owner should seek to sell on the property asset to a third party.

In addition, the standards also set out provisions on ensuring transparency for consumers on product variations and the basis for the offer calculation and, in the case of lifetime annuity providers, on special risks in the event of an early death. The standards also provide that all information should be given to customers by competent, knowledgeable and duly authorised persons, and that a checklist must be signed by both the customer and provider before a contract for a home reversion product is signed, among others.

Commenting on the standards, EPPARG secretary-general, Steve Kyle, said: “Home reversion products have an important role to play in the equity release landscape across Europe, and in a number of countries, such as Germany and Poland, for example, home reversion schemes are in fact the primary solution being offered on the market. This is a market which is also innovating, where a number of different models have been appearing on European markets in recent months.”

“EPPARG’s aim, through launching these standards, is to ensure that the home reversion market is able to grow safely and in a way which protects elderly customers and gives them additional options to supplement their income.”

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