You are here: Home - Better Business - Business Skills -

Equity release is finding the light with market growth – Barker

by: Claire Barker, managing director of Equilaw
  • 20/07/2018
  • 0
Equity release is finding the light with market growth – Barker
An incredible 37,000 new customers were reported by equity release lenders during 2017 representing a 40% year-on-year increase as levels of annual growth soared to a 15-year high.


Figures for the second quarter of this year continued the expansive trajectory, with lending reaching a record high of £971m – up from £394m in the first quarter of 2016, according to the Equity Release Council (ERC).

So, how and why has this previously misunderstood and often maligned product grown so substantially over the past few years?

Well, there are a number of very good reasons for this.

No negative equity and right to retain residency guarantees offered by lenders have assuaged many lingering consumer fears.

Second, prevailing social and economic conditions, including dwindling pension proceeds, rising inflation and low savings returns, have entrenched and compounded many problems faced by people in later life and emphasised the need for alternative streams of revenue.

This is especially so with many mainstream lenders unwilling to cater to this growing constituency.

Third, in-built inheritance protection guarantees have allowed customers to earmark a percentage of their property value against future sales to provide for loved ones at a future date.

Short-term disbursements or gifts are essentially tax free, providing the client lives for seven years after this time, thereby protecting funds from the impact of death duties.


Prevent knee-jerk decisions

Nevertheless, the decision to engage with these products is a big one and will undoubtedly require prospective clients to take specialist advice before proceeding.

Indeed, according to the ERC’s Code of Conduct, all homeowners considering a lifetime mortgage are required to take advice from an independent solicitor or conveyancer before they commit to a scheme in order to “fully understand any loan they take out”.

This is an additional level of protection against ill-informed or knee-jerk decision making and an enlightening response to remaining accusations of equity release as a murky product.



There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.


Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.


Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.


Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
Read previous post:
Lloyds in talks with whistleblowing author of report on HBOS fraud

Lloyds Banking Group is in talks with the author of a whistleblowing report on the HBOS fraud in Reading.