Essential fibre for the soul and if you weren’t there, you missed a treat.
My panel was tasked with debating ‘How to target a growth market: understanding the changes and opportunities in advising the over 50s’. As a pure equity release specialist myself, it provided the perfect opportunity of discovering the age-related themes and issues concerning my general mortgage-broking brethren.
Historically we have sat at opposite ends of the lending spectrum when it comes to the age of our respective customers, but with the average first-time buyer now being 39 and retirement ages being pushed further back, the ground between us is rapidly narrowing. So with our respective markets becoming less clearly defined, I was as keen to listen to the discussions as were the delegates.
But never mind the debate on stage, quite frankly I was intrigued and shocked by the tales from the floor as delegates let off steam over just how poorly their mature clients were being treated by mortgage lenders. Sure I was well aware of the difficulties facing older borrowers, as my own little corner of the lending world has increasingly benefitted from the crumbs knocked off the table by belt-tightening lenders. But still, to hear so many broker tales of ridiculous decisions not to lend, or of banks aggressively pursuing repayment of quite modest mortgage sums, did surprise me; and all because their customers have reached a certain age. When you consider that the mature market proffers the loyalest of custom, offers tremendous potential for cross-sales, is well endowed with gilt-edged pensions, and that we are all inevitably heading for a longer life; the stance of those lenders seems commercially suicidal.
It would seem that I had a few surprises of my own for the delegates, with several telling me over lunch that they hadn’t previously been aware that the equity release sector had filled the void left by Halifax when the Retirement Home Plan was withdrawn. Yes, we now offer interest-only and capital repayment options – whereby the borrower rather than lender exercises much of the control.The knowledge of such possibilities clearly provided relief to the audience, considering the difficulties now facing their customers. News of fixed rates at a little over 5.50% and security of tenure (both for life), not to mention a ‘no-negative equity guarantee’ also came as a pleasant bonus to many.
At opposite ends we (mortgage brokers and equity release advisers) may well be, but we are each looking at precisely the same problem from our different perspectives. Some 150,000 plus interest-only loans without a repayment strategy are set to mature next year, but brokers need not wait for lenders or the regulator to grasp the problem and improve things for their older customers.
The equity release sector is ready and willing to help you and your client and has solutions that look very much like ones you used to have in your own kit bag. So touch the void by gaining the qualification and begin advising your older clients, or refer them to an equity release specialist and quite rightly earn a decent referral fee for solving the conundrum.
Simon Chalk is technical manager at Age Partnership
