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Do equity release customers need every safeguard? – Rozario

by: Andrea Rozario, COO of Bower Retirement
  • 26/01/2018
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Do equity release customers need every safeguard? – Rozario
Over the past few years, equity release has been one of the real standout success stories in the mortgage market. But does this impressive growth really matter?

We broke through the one billion pound barrier in 2013, and have gone on to set new annual lending records every year since.

Last year ended very strongly as the average customer withdrew a whopping, record-breaking £85,946 and lending topped £3bn.

So our industry has signalled its intent to break into the mainstream.

But despite breaking records year-on-year, the man on the street cares little for our lending figures. We must not get caught in a bubble where we pat ourselves on the back so much we forget who matters most – the customer.


Strict regulation and safeguards

Unfortunately, the equity release industry continues to fight against myths that, by this point in our history, should really have been dispelled once and for all.

The tide is turning, but we really need to debunk a few more in 2018. Time and time again, we meet clients who say they think equity release will result in them losing their home or that they will somehow be forced into selling their home to the provider.

However, the reality is that modern lifetime mortgages never result in a loss of ownership – but we need to get better at getting this fact across early on in the process, before the first meeting ideally.

Customers must know that equity release products are strictly regulated and the plethora of safeguards such as the ‘no negative equity guarantee’ continually protect them and their beneficiaries.


Safeguard pick and mix

Of course, there is still the question of whether all customers need all safeguards.

We may well end up in the future with a scenario whereby the most appropriate safeguards for any one customer will lead to and enable an almost pick and mix scenario thereby ensuring that a customer’s biggest concerns are catered for without having to be lumped into the all or nothing category.

The increase in flexible and intelligent product features over the last few years has been underplayed and for some can be difficult to understand.

But we can’t let that stop the progression of the products as they must continue to evolve to meet diverse and increasing customer needs.

We may well see an increase in hybrid styles of lifetime mortgages, a mix of interest paying period with an option to roll up and perhaps products that are designed to help with specific customer needs, such as regular income.


Unfounded media reports

As an industry, we need to continue our battle against the often unfounded media reporting relating to our market and products.

And we must continue to lobby government to allow equity release to take its place among the mainstream mortgage market.

The lifetime mortgage is proving to be an invaluable tool for thousands of homeowners up and down the country, but most people are still not clued up on the facts – let alone the choices.

Spreading information and truth about our industry and the flexible nature of modern lifetime mortgages must be our primary focus in 2018.

Regardless of annual lending figures or breaking records – educating, progression, flexibility and safety must always be at the heart of everything we do.

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