Who are the Equity Release Council (ERC)?
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The Equity Release Council is a body formed in 1991 that oversees the equity release industry, ensuring a high standard of products and the protection of homeowners unlocking equity from their estate.
Listen up! You’re about to discover why equity release is truly safe.
With a troubled history fraught with scandal and debt, equity release hasn’t always been the best idea for retirees.
The question is, have things changed in Aug 2022?
What You’ll Learn in This Article:
We’ve spent hours studying over 28 regulated plan providers, summarised the crucial role of the Equity Release Council, and put together this comprehensive guide.
Are you itching to fully understand the role of the Equity Release Council?
Let’s find out now!
Equity Release Explained
Before you continue reading, we’ve summed up what you’ll want to discover about equity release products in this short video. Check it out!
What Does the Equity Release Council Do?
The role played by the Equity Release Council is to regulate legitimate equity release companies that are located in the UK and protect the interest of the homeowner.
4 of the Equity Release Council’s¹ responsibilities include:
- Offering you all the information you might require on equity release and its products.
- Protecting any consumers using equity release, and those who are considering releasing equity from their home.
- Raising awareness on how equity release might be an ideal option after retirement.
- Representing more than 180 member firms and more than 500 people in the equity release industry, from experienced financial advisers and lenders to representatives and surveyors.
The Council Regulates Legitimate Equity Release Providers
The Equity Release Council is there to help you recognise the equity release companies to avoid, such as:
- Plan providers who don’t have a ‘no negative equity guarantee.’
- Lenders who aren’t members of the ERC.
- Providers who charge high interest rates.
- Lenders who charge very high repayments and who charge them early.
- Equity release firms that give you large loan amounts before they even assess your circumstances.
What’s Their Code of Conduct?
The Equity Release Council’s code of conduct includes your having the right to remain home for life and never owing more than the value of your estate.
Here are more details:
- The borrower has the right to live at home until they pass away.
- The borrower will be given clear, and concisely written paperwork which will includes details about setup costs and information on how changes in house values might affect the plan.
- The consumer’s preferred representative steers any legal work. The borrower and their solicitor² will sign a certificate confirming the plan’s certification and that all the risks and jargon are understood.
- The client can move their plan to a different property without facing penalties.
- The Equity Release Certificate will detail the cost to the client’s asset and estate.
- Equity release plans carry “no negative equity guarantees”.
Are you wondering what this means? Continue reading to find out!
Before You Keep Reading….
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What Is the ‘No Negative Equity Guarantee?’
Simply put, the no negative equity promise means that you (or your estate) will never be liable for more than the property’s value when it is sold.
Latest Equity Release News on Guaranteed Voluntary Repayments
In January 2022, the Equity Release Council announced that all new lifetime mortgage plans unlocked through member lenders must come with the option of voluntary loan and interest repayments.
Furthermore, homeowners can stop and start making payments whenever they wish.
Who Are the Equity Release Council?
The Equity Release Council is a non-profit organisation that regulates the equity release industry.
What Are the Product Standards Put into Place by the Equity Release Council?
The product standards put into place by the equity release council include:
- When it comes to lifetime mortgages, the interest rates should be fixed, or if they’re variable, there should be a cap (upper limit) set for the life of the mortgage.
- You have the right to continue residing in your home until the loan term ends, as long as the estate is your primary residence and you stick to the terms and conditions stipulated.
- You have the right to move to another house as long as the new estate is acceptable to your plan provider.
- All equity release providers should offer you the ‘no negative guarantee’ that protects you from paying more than the value of your home.
What Are the Equity Release Council's Roles and Responsibilities?
The equity release council’s roles and responsibilities include:
- Safeguarding equity release users.
- Raising awareness on how equity release might be an excellent choice after you retire.
- Representing more than 200 member companies and over 1,000 persons subscribing to the equity release products, financial advisers, lenders, and even surveyors and their representatives.
How Does the Equity Release Council Protect Me?
The equity release council protects you by ensuring that lenders offer fair plans that benefit both parties.
Spending time working out your finances and retirement plan can be quite draining.
Fortunately, the Equity Release Council is there to protect you, should you choose to release equity from your property.
The council will help prevent you and your heirs from spending too much money on interest and losing unnecessary cash.
It’s vital in Aug 2022 to use a regulated and top equity release provider and be aware of the equity release providers to avoid and release equity in a safe and life-changing way.
You can get in touch with your financial adviser today to start your equity release journey.
Make sure you use our equity release calculator and see the amount of equity you can release with a provider that’s a member of the Equity Release Council!
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