Mortgage Solutions polled brokers on whether they would take an equity release qualification or appoint an ER specialist, with 73 per cent agreeing they would do one or other, while 17 per cent replied negatively.
Only 10% of those polled were unsure.
Will Hale, CEO at Key, said that with increasing numbers of consumers looking to housing equity for support in later life, it is great to see that only 17.2% mortgage brokers were not considering the equity release sector.
He said: “Just five years ago we would expect this number to be higher. This highlights the growth achieved in the market and the confidence in equity release as it would appear that mortgage brokers are acting in the best interests of their clients.
“It is essential that customers are given quality information and advice about all financial products on the market so they are able to make the best decision for their individual needs.
“Key Partnerships has seen a 38 per cent increase year-on-year 2017-2018. Last year was a strong year for Key and the equity release market as it almost reached the £4bn mark. All indicators for 2019 show that this period of growth will continue as more customers seek advice on equity release.”
Fast growing market
Adrian Anderson, director of Anderson Harris, revealed that by the end of Q1 2019 all the advisers at Anderson Harris will be qualified to provide advice and transact equity release mortgages.
He also said that it does not take long for brokers to get familiar with the equity release advice process and up-skill to be able to advise in this area.
He added: “I think it is important for advisers to be able to advise on a regular mortgage and equity release. The equity release market is an extremely fast growing one hence Anderson Harris needs to be able to facilitate this requirement in house and grow with the market.
“The products have moved on significantly in terms of the cheaper rates available, ability to service the mortgage/overpay and have the flexibility to draw down further funds with some providers.
“Equity release is no longer the loan of last resort. There are many viable reasons why a borrower would actively choose to consider an equity release mortgage.”
Ensuring clients receive advice on available options
David Hollingworth, associate director at L&C, said that the poll result is encouraging, in the wake of the substantial growth that the equity release sector has seen recently.
He added: “This proves that the majority of brokers recognise that there is a need for old borrowers to access different forms of finance, such as equity release.
“Those who replied negatively might not have the right customer base to access the equity release market, or maybe they think there is not enough demand.”
However, Greg Cunnington, director of lender relationships and new homes at Alexander Hall, said that this result is not surprising, but in reality this is still quite an under served field.
He said: “There is no doubt that the later life lending space is a growing market and as such a real opportunity for intermediaries, and I anticipate this to carry on growing for the next few years.
“The main concern is ensuring the client receives the range of options. There are some very strong later life lending mortgage options now available, both on repayment and interest only, with various lenders such as Family BS and Ipswich showing real flexibility on the maximum age.
“We also have RIO options from several lenders that I anticipate will become a popular part of this market in the coming years. Whether a later life mortgage, RIO or equity release is the best option varies client by client.
“As such the main key for a broker is to ensure our client can receive advice and access all of the available options. A broker needs to be confident if they do ER themselves that they are up-skilled enough in this area to ensure the client receives the best advice.”