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LLLE: Equity release product innovation could incentivise greener homes  – Scottish Widows

  • 26/01/2021
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An equity release boss at Scottish Widows Bank said product innovation could be driven by incentives to drive down carbon emissions through property development to protect both the property investment and its value.


Speaking at the Later Life Lending Event online, hosted by Mortgage Solutions, Emma Watkins, managing director of retirement and longstanding at Scottish Widows Bank said just under nine per cent of UK property is at risk of flooding, increasing by 40 per cent by  2050.

Carbon emissions from residential housing is responsible for 15 per cent of UK greenhouse gases making it critical homeowners and the sector join the fight against carbon emissions, she added.


Regulation will be critical


Watkins said regulation is likely to drive behaviour and fuel energy efficiency drives to retrofit houses and incentivise this with lower equity release or mortgage rates.

“The equity release market is particularly exposed to climate issues and tends to be backed by older housing stock. This means there are interesting opportunities in product design where borrowers who can evidence property improvements and a lower Energy Performance Certificate (EPC) could be rewarded with lower product rates,” said Watkins.

“It’s an opportunity for the future and a win-win for the funder and customer,” she added.

Referring to the regulator’s intervention on equity release advice standards in June last year, Watkins added that as a provider it would continue to improve the advice journey both at origination, but perhaps more importantly over the lifetime of the product.

During the Q&A session, Watkins confirmed the provider was working with seven or eight advice firms already but was in discussions to broaden distribution out to the whole advice market by the end of June.

She added: “Some of you will have seen the FCA’s letter to product providers and distributors, so we will look at everyone to make sure these products are appropriate to the firm.”

Another delegate asked if Scottish Widows planned to make its drawdown facility available for life.

Watkins replied: “We think it’s important that customers go back to top up advice. It’s always something we are looking at, but the FCA letter encourages us all to look at these products end-to-end, over a 30 to 40 year timescale. But we will work with the market and see what we can do.”


Register online here to see all the presentations from the Later Life lending conference for up to 30 days after the event.

Register for your free ticket to the Equity Release Awards online on Thursday, the 28 January from 4-5pm.

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