An area that is often misunderstood by customers and ignored by national press.
From our own experience we have found an increase of 25% on customer enquiries and a recent adviser survey we conducted showed the positive attitude many customers are now beginning to show towards equity release. In fact there is a real “buzz” in the air which is such a step change to just a couple of years ago.
The advent of hybrid mortgages and the pressure of the interest-only time bomb is all going to impact on equity release and the innovation in product development.
Just recently the announcements regarding the redefinition of lifetime mortgages has brought under the spotlight the likelihood of new types of mortgages aimed at the older generation. It’s entirely feasible that the new definition will lead to products that will open up options and choices to a wider range of people, but we have to be extremely careful that all the hard work over the years, by the industry and the Council is not side-lined in favour of an advice process that does not counter for the specific needs of the older generation.
MMR regulations are making it more and more difficult for pensioners to access finance and affordability calculations are often an issue which is currently making equity release an ever increasing option.
However, this market is likely to evolve dramatically over the next five years with the changes in regulation, re-definition of lifetime mortgages, hybrid products and changing attitudes of an older generation ever more aware of the value in their home coupled with the desire for a better standard of living initially envisaged with the inevitable drop in income in retirement.
We are getting older but only in years, attitude, expectations and activity levels remain younger for longer, and this is great news but resources have to keep up and with the average pension pot equalling something like 30,000 it is madness to think that housing wealth won’t have an increasing part to play.
