News

The European Pensions and Property Asset Release Group (EPPARG) has today announced the launch of high level standards to promote growth of the home equity release market in Europe.

EPPARG has developed the standards, which are known as the ‘EPPARG 10’, through discussions with its members and associates which make up more than 75% of the home equity release market in Europe. The standards aim to build confidence in equity release solutions among both potential funders and customers, with a view to growing the European market, given that the product is still at a nascent stage in a number of European countries and non-existent in others. 

The standards highlight that equity release mortgage products shall be lifetime products which enable customers to live in their main homes for their whole life, and set out the key terms and conditions regarding the provision of the product, which deal with repayment terms, the freedom of customers to transfer the loan to another suitable property, early redemption rights and interest rate options, among others. 

In addition, the standards set out a number of conditions on consumer protection, to ensure that all information is provided 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 an equity release product is signed, among others.

Commenting on the standards, Steve Kyle, Secretary General of EPPARG, said:

“The home equity release market has been continuing to grow safely in Europe, and in recent months market players have been adapting to the ‘new normal’ in the light of COVID-19. Through the launch of our EPPARG 10 standards, we aim to contribute to the further development of a safe market across Europe, to the benefit of elderly homeowners.”

“There are clearly common demographic challenges across European countries, and we consider that home equity release can provide a partial solution to the ‘pensions gap’. Home equity release provides considerable social and economic benefits to consumers, and the new standards will help ensure that equity release is a safe financial option for elderly homeowners seeking to supplement their income.”

Lennart Grabe, Deputy Secretary General of EPPARG, said:

“There is great potential to build the home equity release market in Europe as a time where the continent’s population is ageing and national pension systems are under pressure. In countries where the product has become established, such as Sweden, we are already seeing that it can make a huge difference to the quality of life of elderly people, by supplementing the incomes of those who are asset-rich but cash-poor. There are significant opportunities for new funders and investors to enter the European market given that home equity release providers on the continent are under-funded at present.”

“We hope that the EPPARG standards will encourage the investor community to engage with companies in the sector and foster the development of cross border businesses within Europe and, why not, the world, based on similar sound basic product conditions and proper market behaviour”.