The Equity Release Council
The Equity Release Council is a non for profit organisation, which was formed in 1991 when it was called the Safe Home Income Plans (SHIP) and has been known as the Equity Release Council since 2012. It aims to fully represent and faciliate the safe use of the equity release market. Its membership includes mortgage advisers, solicitors, lenders, mortgage adviser intermediaries, and other industrial professionals - each committed to supporting the Equity Release Council's Statements of Principles and related to standards.
The Equity Release Council's efforts are in developing, maintaining and enforcing the integrity of an appropriate set of rules and principles to ensure customers can access the highest standards of advice and secure solutions to release equity from their homes. Put it simply, protecting and educating the consumer to the valid use and access to equity release by guiding and supporting the advisers in their delivery.
Statement of Principles
The Equity Release Council exists to promote high standards of conduct and practice in the provision of and advice on equity release.
Adviser members will:
- Ensure that all actions promote public confidence in equity release as a potential retirement solution.
- Act in utmost good faith at all times.
- Communicate high expecations for equity release advisers in all their dealings.
- Ensure conflicts of interest are managed fairly and reduced to the lowest practical level.
- Exercise due skill, care and diligence in all the adviser does and uphold the standards set out by advisers' professional bodies at all times.
- Always act with the best interests of advisers' clients being paramount, treating csutomers fairly in all their actions.
- These principles are set out along with The Equity Release Councils' Rules and Guidance (website: www.equityreleasecouncil.com/standards.
Equity Release Council Code of Conduct
The Equity Release Council has a code of conduct which sets a strict criteria to which mortgage advisers and other members must adhere to. The Code of Conduct states that:
- Customers have the right to remain in their property for life provided the property remains their main residence.
- Advisers will provide fair, simple and complete presentations of the lifetime mortgage. This means the benefits and limitations of the product together with any obligations on the part of the customer are clearly set out in the provider's literature. It should include all costs that the customer has to bear in setting up the plan as well as the tax implications, their postion on moving house and the effects of changes in house values on their loan.
- The customer's legal work will always be performed by the solicitor of his or her choice. In all cases, prior to the completion of the plan, the solicitor will be provided with full details of the benefits the customer will receive. The solicitor will be required to sign a certificate, to the effect that the plan has been explained to the customer fully and that they understand that risks and benefits of the lifetime mortgage.
- Customers have the right to move their plan to another suitable property without any financial penalty.
- The Equity Release Council certificate will clearly state the main cost to the customer's assets and estate, for example how the loan amount will change or whether part of all of the property is being sold.
- All equity release council plans carry a 'no negative equity' guarantee which means you will never owe more than the value of your home.
Full details of the lifetime mortgage, including the fees and charges are contained within the Key Features Illustration given to you by the equity release adviser. This will also explain the circumstances in which the lender can increase its mortgage rate at times other than an increase in the Bank of England base rate or after any initial discounted or fixed rate period. This also confirms the risk to your home if you do not keep up repayments. You should read all documents carefully and ask your adviser if you are unsure or require further clarification on your equity release mortgage.