Home reversion and home purchase plans - FAQs

Before applying for authorisation, you should decide whether your firm needs permission to carry on any or all of the Home Reversion (HR) and Home Purchase Plan (HPP) regulated activities. If you want to apply for authorisation, your firm's application must specify the regulated activities you are applying for permission to carry on. The relevant regulated activities are:

For HRs:

• entering into a regulated HR as a reversion provider;
• administering a regulated HR;
• arranging (bringing about) a regulated HR or making arrangements with a view to another person entering into a regulated HR as a reversion occupier or a reversion provider;
• advising an actual or potential reversion occupier or reversion provider on the merits of entering into or varying a regulated HR; and
• agreeing to carry on any of the above.

Broadly speaking, a regulated HR is an arrangement by which a person (the reversion provider) buys all or part of someone's (the reversion occupier's) home on the basis that the reversion occupier can stay in the home until they enter a care home or die, or the arrangement comes to an end after a fixed period (which must be of at least 20 years).

For HPPs:

• entering into a regulated HPP as a home purchase provider;
• administering a regulated HPP;
• arranging (bringing about) a regulated HPP or making arrangements with a view to another person entering into a regulated HPP as a home purchaser;
• advising an actual or potential home purchaser on the merits or entering into or varying a regulated HPP; and
• agreeing to carry on any of the above.

Broadly speaking, a regulated HPP is an arrangement by which a person (the home purchase provider) buys a property for someone (the home purchaser) on the basis that the home purchaser lives in the property and buys it back over or at the end of a specified period.

If you are in any doubt about whether you are carrying on a regulated activity, you should consult the guidance for firms on the new home finance activities found in Appendix 3 of CP06/8 (this is draft guidance which will be updated and made final after Parliament has approved the new regimes). Or you should look at the relevant legislation on the HM treasury website. You may also wish to seek independent legal advice, if appropriate.

A firm which is currently not authorised by the FSA and proposes to carry on any of the new regulated activities for HRs or HPPs will need to apply for authorisation by us. You will need to complete the relevant forms and read the further guidance on how to apply on our website. HR and HPP providers (those firms seeking permission to enter into HRs or HPPs) will need to contact our Firm Contact Centre (0845 606 966) for further guidance.

A firm that is already authorised by the FSA will need to seek a variation of permission (VOP) if it wants to carry on any of the new regulated activities. You will need to complete the relevant forms and read the further guidance on how to apply on our website.

There is a one-off authorisation application fee to enable us to process the application. The amount will depend on whether the application is straightforward, moderately complex or complex. We expect most applications to be straightforward. See our website for more information on the current fee levels.

When applying for authorisation, you must send a cheque for the relevant authorisation application fee in full with the application form. Your application will not be processed until we receive the full fee (post-dated cheques will not be accepted).

We do not refund the authorisation fee so you need to be certain that you want to go ahead with the application before applying.

Regulation took effect from 6 April 2007 so you should have been authorised by then.

You can withdraw an application at any time before the application is granted or refused by writing to us. Your written notification should be signed by someone with appropriate authority. We cannot refund the application fee so you need to be sure that you want to apply before you do so.