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Equity release, technological innovation and the problem of under-valuations – Pure Retirement Brighton Supper Club

by: Max Liu
  • 28/03/2019
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Last Wednesday, around about the time when Theresa May was addressing the nation about the ongoing Brexit uncertainty, a selected band of equity release brokers attended the Pure Retirement supper club in Brighton where Mortgage Solutions editor Victoria Hartley chaired a wide-ranging discussion of industry topics.


Chair, Victoria Hartley, group editor at Mortgage Solutions, began by asking the assembled brokers about the growth of the equity release market which is expected to pass the £5bn mark this year. To what did brokers attribute this growth?

“Knowledge (of the product) has driven sales,” said one broker. “As long as the rate is right and the plans are right, people are prepared to take the risk. The flexibility of these plans, combined with the lower rate, has driven the market.”

The brokers agreed that increased media coverage of equity release, combined with word of mouth, had raised its profile, although one broker reported customers saying: “I don’t want equity release, I want a lifetime mortgage.”

There was laughter at this but it was a reminder that plenty of people still don’t know about equity release, even though it could suit their retirement needs. What could be done to make this area grow even more?

“We’ve got to get the FCA to stop saying it’s a product of last resort,” said one attendee, while another thought the political situation in the UK was already threatening to slow down growth.

“The demand for equity release has flattened this quarter,” said the broker. Asked why, said pessimist mentioned “the b word” (Brexit) before elaborating:

“In equity release, and the economy more generally, people are thinking: ‘We’re going to see what happens, watch and wait.’”

Another broker urged colleagues to try to reach customers who are off-line (more than half the 4.5 million adult Britons who have never used the internet are aged 75 or over):

“If there’s one thing we can do [to promote equity release], it’s to try and get the people who are not going online,” they said.

Community outreach events, where brokers meet in person with potential customers, were recommended, as was a recruitment drive, although some pointed out that elderly borrowers tend to prefer experienced advisers, especially as advising on equity release required specific expertise.

“With a mortgage, you ask the borrower how much they need and what’s their income and, based on that, you sort it out,” said a broker. “Whereas with a lifetime mortgage, there are many more factors that come into it.”


Technology can make advisers lives easier

Technology will be key to expanding equity release, as Chris Flowers, from the evening’s hosts Pure, pointed out: “I think what you will see is a huge play towards technology (that is) able to make advisers’ lives easier,” he said when asked about Pure’s plans.

Talk turned to Standard Life which had caused confusion earlier in the week with what emerged through various trade publications as a misleading publicity campaign to announce its collaboration with Age Partnership.

“Standard Life haven’t re-entered the equity release market,” Flowers explained, scotching inaccurate reports. “It’s [acting as] a lead generator.”

One broker summarised the Standard Life news as all agreed it was a positive for the market: “They are almost brokering, so they’re looking to introduce. It’s still good for the market because Standard Life is a big name and if it’s being connected with equity release, it’s kind of like ‘oh, everybody is doing it.’”


Single surveyor dominance ‘not good for the market’

Towards the end of the evening, brokers expressed concern about under-valuations and the increasing market dominance of surveyors e.surv in the market.

“It seems that e.surv are working with five out or nine lenders and that’s not good for the market,” said one broker.

“You get massive variances in valuations,” said another, alluding to disagreements between brokers and surveyors about the value of properties.

To illustrate, one broker talked about a client who challenged a surveyor’s valuation:

“I had a fair challenge, a good challenge for a flat near Notting Hill and the owner was right,” said the broker. “I thought: ‘If this doesn’t get overturned, nothing will.’ It didn’t get overturned.”

Another broker thought surveyors’ stubbornness about valuations was inevitable, saying: “You’re questioning (the surveyor’s) professional judgement so they’re always going to go like that.”

Flowers, meanwhile, thought surveyors could play an even more important role in equity release: “The biggest requirement for surveyors is in the equity release market,” he said. “We need to get away from (the idea that) it’s a valuation (that surveyors provide); it’s not a valuation, it’s a property assessment.  Value is one of the elements that (surveyors) assess but it’s more, is this property acceptable to the lender set out in their criteria?”

The last word, however, concerned the importance of brokers: “Most of the property assessment is done by us,” said one attendee. “There are not many cases that I can think of that fall foul of property assessment.”


Attendees at Market in Brighton


Hannah Boxshall Equity Release Supermarket
Des O’Hara Access Equity Release
Matt Sutton Emerald
John Whyte The Right Equity Release

Danielle Dennis Mortgage Solutions
Oonagh Sheehan Mortgage Solutions
(Chair) Victoria Hartley Mortgage Solutions

Chris Flowers Pure Retirement
Inken Bushnell Pure Retirement
Jane Forshaw Pure Retirement


With huge thanks to all who joined us for such an enjoyable evening, particularly our hosts Pure Retirement.


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