The UK prudential regulation authority’s valuation principles for equity release

In recent years the UK Prudential Regulation Authority has been involved in an ongoing discussion with equity release firms over the principles to be used in the valuation of equity release mortgages. The UK regulator proposed a set of such principles in its Supervisory Statement SS 3/17. These prin...

Full description

Saved in:
Bibliographic Details
Published in:Turkish Economic Review 2022-03, Vol.9 (1), p.1
Main Authors: BUCKNER, Dean, DOWD, Kevin
Format: Article
Language:English
Subjects:
Collateral
Discount rates
Equity
Mortgages
Present value
Principles
Property values
Rentals
Validity
Valuation
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:In recent years the UK Prudential Regulation Authority has been involved in an ongoing discussion with equity release firms over the principles to be used in the valuation of equity release mortgages. The UK regulator proposed a set of such principles in its Supervisory Statement SS 3/17. These principles mark a major step forward in equity release valuation methodology. They are based on elementary pricing economics, their validity is easily established and they are easy to apply. They can be used to provide a cross-check on any proposed set of valuations and so test the reliability of the underlying valuation model or its calibration.
ISSN:2149-0414
DOI:10.1453/ter.v9i1.2293