Vol. 575 No. 1
114 Ms Shortall asked the Minister for Finance the regulatory regime for a product (details supplied); if he has satisfied himself that sufficient controls are in place to safeguard the interests of consumers in this regard; the plans he has to modernise legislation in this regard; and if he will make a statement on the matter. [27985/03]
Schemes, such as the one the Deputy is referring to, are a relatively new type of financial product in Ireland. They are a means whereby an elderly person or couple can release part of the value of their home, while continuing to live in it. They also involve companies paying homeowners a cash lump sum in exchange for an interest in their house. The homeowner retains the right to live in the property rent-free until they die or move into a nursing home for six months. After this, the property is sold and the proceeds are divided between the property investment company and the homeowner or his estate.
This type of scheme can be attractive to some elderly people who need to supplement their retirement income or who wish to improve their quality of life. There are, of course, alternative options such as moving to a smaller property or renting out a part of their home. However, they may not wish to avail of these options.
The type of scheme concerned differs from certain other schemes which are based on mortgage lending against the security of a property. Since in this case there is no loan or investment product involved, and since there is no financial institution involved, this type of activity is not currently regulated by the Irish Financial Services Regulatory Authority. While I have no plans to introduce legislation on this topic at this time I would not rule out the possibility, if this were felt to be necessary at some stage.
