Equity Release Council
Spry Finance have taken membership of the ERC in the UK and ensure we adhere to the standards and codes set by the Council in the UK.
The Equity Release Council in the UK represents the equity release sector and exists to promote high standards of conduct and practice in the provision of and advice on equity release which have consumer safeguards at its heart.
These standards and safeguards have allowed the sector to grow, giving financial advisers and their customers confidence in the products, dispelling myths about equity release, and educating the public about the potential to access the wealth in their home for a variety of uses.
It sets the standards and principles for members of the Equity Release Council. Through these standards, members can guarantee their customers that they offer products and services which conform to the best practices of the sector, ensuring customers are fully informed and properly protected.
Our product standards are set out below. Our members are only allowed to tell you that a product meets these product standards if it meets all of them. If you are offered or are considering a product that does not meet all of the standards, the product literature must explain which standards are not met, and give an illustration of the types of risk that this might pose for you.
Our product standards are as follows:
- For lifetime mortgages the rate must be fixed for each release or, if variable, the rate must be capped for the life of the loan.
- You must have the right to remain in your property for life or until you need to move into long-term care, provided the property remains your main residence and you abide by the terms and conditions of your contract.
- You have the right to move to another property subject to the new property being acceptable to your product provider as continuing security for your equity release loan.
- The product must have a “no negative equity guarantee”. This means that when your property is sold, and agents’ and solicitors’ fees have been paid, even if the amount left is not enough to repay the outstanding loan to your provider, neither you nor your estate will be liable to pay any more.
- All customers taking out new plans which meet the Equity Release Council standards must have the right to make penalty free payments, subject to lending criteria.
Independent legal advice
You may choose your own solicitor to carry out the legal work in connection with your plan. Before the plan is completed, your solicitor will be provided with full details of the plan, including the rights and obligations of both parties (you and your product provider) under the contract, should you choose to go ahead. Both you and your solicitor will be required to sign a certificate confirming that these rights and obligations have been explained to you and that you wish to enter into the plan.
Information about and explanation of your equity release plan
You will be provided with a fair, simple and complete presentation and explanation of your equity release plan. The benefits and limitations of the plan will be clearly set out, together with your obligations under the terms of the contract. You will be given information about:
- all the costs that you will have to bear in setting up the plan;
- the tax implications;
- what will happen if you wish to move to another property; and
- how changes in house values may affect your plan.
Find out more about the ERC in the UK – Equity Release Council »