Just Group (JUST) shareholders were given some relief after the Prudential Regulation Authority softened its stance towards the capital treatment of equity release mortgages, which the life assurer uses to back its annuity portfolio.
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After a three-month consultation, the regulator announced that providers will have to account for 13 per cent volatility in house prices – towards the lower end of the range proposed – when calculating the value of equity release mortgages. The deferment rate – the discount on the value of the property for future possession – has been set at the minimum rate of 1 per cent.
