With a 12 per cent market share More 2 life now claims to be the third largest equity release lender in the UK, behind Aviva and Legal and General.
The lender has benefitted from the surge in equity release during the last few years. Data from the Equity Release Council, the industry body whose members account for 95% of all equity release lending in the UK, shows total annual lending was £1.06bn in 2008 and £2.15bn in 2016 – an increase of 96%.
This growth has continued into 2017 as, according to the latest UK Equity Release Market Monitor report from Key Retirement, in the first half of 2017 equity release lending increased 33 per cent to £1.25bn, from £934.4m in the first half of 2016.
The equity release boom is expected to continue with market research firm Mintel predicting that high levels of growth will be sustained over the next few years taking the value of the market to almost £5bn by 2021.
A spokesperson for Mintel explained: “Around 40,000 interest-only mortgages are estimated to mature each year from 2017-32. Roughly a quarter of these customers are thought to have a shortfall with no repayment vehicle, this provides equity release firms with a rolling target audience to engage with each year in addition to those who simply want to release funds in order to enjoy their retirement.”
Dave Harris, chief executive officer of More 2 Life, said: “Achieving £1bn of lending since the launch of More 2 life is a fantastic milestone. The lifetime lending sector is becoming increasingly mainstream in the UK mortgage market, amid greater innovation from existing lenders in response to an influx of new lenders and increasing market demand from older homeowners.
“As the market evolves, we will drive further product innovation and will continue important work with advisers to ensure unlocking equity is seen as a relevant option when discussing retirement planning with clients. We look forward to continuing our success in the years ahead, which will undoubtedly be an exciting time for both the business and the wider equity release market in the UK.”
A spokesperson promised: “We are also expecting to grow significantly this year in terms of our existing product lines with another record year of lending.” Moreover, it plans to introduce some new products later this year.
Asked about average lending rates, a spokesperson said: “Rates have been coming down over the past 12-18 months, and now, typically, rates are around the 5% AER mark for an average case.”
As to the importance of advisers in its growth strategy, a spokesperson confirmed: “Advisers are at the heart of better financial outcomes for clients in retirement and we are dedicated to supporting the specialists in this market. We create a range of content and support for advisers, including a CII-accredited webinar programme and regular research papers on the retirement lending market.”