The Financial Services Authority, the U.K.'s market regulator, plans to regulate home equity release plans and Islamic mortgages.
Home Reversion Plans, which allow homebuyers to unlock some of the money tied into their property, and Home Purchase Plans, a home financing system acceptable under Islamic law, will come under the FSA's authority during the first half of next year.
Businesses offering those products will have to prove they are competent and able to properly advise customers. They must also prove that they are ``fit and proper'' to sell financial products.
Home Reversion Plans are generally take out by the elderly. It allows them to benefit from the value of their homes without moving out of them.
Both products work using a sale and leaseback arrangement. The FSA already regulates another type of Islamic mortgage known as a ``Murabaha.'' |
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