Mortgage News
Increased competition and market growth: the year in equity release – Simon Chalk
As the champagne bubbles from the Equity Release Awards last month begin to ebb away and with the end of the year in sight, now would seem like as good a time as any to reflect on the events of the past 12 months.
In our own ‘back to the future’ moment, the equity release sector returned to a growth trend, matching its peak year of 2008 by reporting a five-year high with record sales in the third quarter of 2013. That we will surpass the £1bn mark by the end of the year is pretty much in the bag with further continued expansion almost certain.
Reinforced by an increasing number of customers taking out plans; for larger sums at that, the sector is irrefutably back on track and with two-thirds of customers having opted for the flexibility of a drawdown plan, clearly proves that when providers offer what people want, people will buy.
Competition, evidenced by record low interest rates (lifelong fixed – lest we forget) and generous incentive packages has ensured that we continue to deliver terrific value for money – frustrating the claims to the contrary of some from the consumer lobby camp.
The birth of Pure Retirement – the first new provider in over three years, will only help to increase the market’s appeal, surely encouraging other new providers to come to market.
Interestingly this year, we have begun falling under the close attention of the government for the right reasons, as they finally begin to cotton on to the fact that housing wealth can offer one potential solution to the problems caused by a lack of retirement savings in an ageing population.
Industry, not regulation, must lead later life lending change
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In years to come we may well look back fondly on 2013 and say “That was the year that was!”
Simon Chalk is equity release technical manager at Age Partnership