Homeowners considering an equity release product must now have at least one face-to-face meeting in person with a solicitor before taking out a plan.
This is under new rules being enforced with immediate effect by the Equity Release Council, which regulates the later life mortgage market.
All new customers have been required to seek independent legal advice as part of the process of taking out equity release since 1991, when industry standards were launched.
The face-to-face requirement was added in 2013 but was suspended, temporarily, during the pandemic when social distancing was in place.
Existing cases which are in progress today and have used this temporary amendment must now be completed by 31 July.
All new cases from today must involve an element of in-person, face-to-face legal advice in order to be accepted.
Claire Barker, CEO of Equilaw and non-executive director of the Equity Release Council, said: “Independent legal advice is one of the unique distinguishing factors that sets equity release apart from other retail financial services when it comes to customer safeguards and protections.”
But, she explained, technology will still play a role in the equity release process. “While face-to-face legal advice remains the gold standard, many uses of technology during the pandemic can continue to benefit customers in the long run,” Claire explained.
“A good example of this is financial advisers using video conferencing to bring family members into conversations about releasing equity or solicitors using online case trackers to liaise with clients.”
