The advice firm also noted that many advisers were unaware of the changes and evolving options available within the market due to its rapid transformation and growth.
Jason Ruse, head of Key Partnerships, told Mortgage Solutions that the ability to purchase property and also to pay off interest were two equity release traits advisers were largely unaware of.
“Using equity release to buy a property is quite unknown, but can really help people where they may want to move closer to their children or into different types of housing,” he said.
Ruse also noted that using equity release to increase a relative’s deposit with the beneficiary paying the interest and having a lower loan-to-value mortgage was another option.
“We have a sales aid which explains those differences, so that’s something we’re really aware of as it is also going to be easier to get through the 75 per cent loan-to-value credit scoring,” he added.
“We are looking at that because there’s potentially a conversation for brokers to have and it is an interesting approach for helping first-time buyers get on the property ladder.”
Grow to 11 per cent of income
According to Key’s data, mortgage brokers have seen the largest growth in referring partnerships, closely followed by independent financial advisers, accounting for 42 per cent and 40 per cent of the new agreements respectively.
The firm said belief in this part of the market was evident as two thirds of introducers predicted it would grow for them over the next five years, expecting it to eventually provide around 11 per cent of their income.
When asked why they chose to refer rather than advise on equity release, 26 per cent said their head office being more comfortable with this approach and 21 per cent choosing it themselves.
However, just one in three introducers regularly mentioned equity release to their clients and only 42 per cent started the discussion if they felt they had found a client who might benefit.
Marketing and education materials
Key suggested that advisers may need to improve their understanding of equity release to ensure they could fully support all their clients.
As a result, it has launched a rebranded website and portal which includes marketing and education materials to give advisers more tools to help create conversations with customers.
“Most of advisers’ business is obviously in the mainstream market and as this is more specialist they are not in it every day,” Ruse continued.
“That’s what we are trying to get out there. There’s been a lot of market growth so brokers are now getting more customers interested in it.”
Key also noted that it had seen particularly large upticks in referral registrations at significant milestones.
These included the re-introduction of retirement interest-only (RIO) mortgages, the end of the financial year, and Nationwide’s entry to the market.