LiveMore’s head of intermediary sales Phil Quinn (pictured) said the firm was planning to launch into the equity release market in the near future.
“We are looking to launch into the equity release market in the next couple of months and are currently working on our proposition,” he said.
The firm currently offers retirement interest-only (RIO) mortgages, interest-only fixed term mortgage products and capital and interest fixed term mortgages.
Speaking on a webinar earlier this week, Quinn explained that the lender was “starting to see more and more remortgage activity in this space” as it had changed from a “desire or want for borrowing to a necessity”.
“That necessity is often driven by cost of living, interest rate pressures and inflation pressure we find ourselves in today,” he noted.
Quinn added that a “key area of opportunity” was the Bank of Mum and Dad or the Bank of Grandparents, which he said was already a feature of the market but would “continue to increase”.
Later life lending ‘next big thing in the market’
Quinn said there was “big opportunity” in the later life lending market as more people were rolling off interest-only deals and a huge swathe of asset-rich income poor borrowers in the over 50s bracket.
He explained that there was around £200bn of interest-only lending rolling off over the next 10 years and peak of interest-only maturities was this year at £10bn.
“A lot of customers who have had mortgages for a long period of time typically 10 to 20 years plus will be on interest-only…and either their endowment hasn’t met the repayment figure or they said they were going to downsize but circumstances have changed and they no longer want to downsize.
“But they find themselves today in a situation where they’re coming to the end of the mortgage, the high street bank wants their money back and they need to find a solution and plan for the future,” he explained.
He said LiveMore’s proposition “caters for this very problem” where there was a “continuous cycle of interest-only lending that is coming to expiry”.
Quinn noted that another part of the market, which was the “polar opposite”, who were asset rich but income poor.
He noted that there was around £2trn in equity in the over-50s market, which was an “enormous sum of money”.
“If you’re not involved in this market, or if you are already, it’s just a bigger and more exciting option to be part of and I will go as far as saying I believe it’s actually the next big thing in the market,” he added.
Brokers need to ‘diversify the business mix’
Quinn said over the years he’s seen advisers with strategies that are one dimensional and primarily considering only high street lending.
“I believe now is the great opportunity to think about diversifying your business mix, especially if your book is predominantly high street and you’re not getting paid as much on product transfers or high street banks are trying to poach customers via digital solutions,” he added.
He said specialist lending and later life lending would be a good way to “diversify the business mix”.
“Customer circumstances and market conditions change frequently and that’s a really important one to keep in the back of your mind. How can you be part of that change and part of the new trend and what is becoming the big boom in the mortgage market,” Quinn noted.
He added that brokers could also earn more, pointing to the firm’s enhanced proc fee of 1.1 per cent for 20-year fixed rates and fixed for life mortgages as well as its ongoing proc fee.
The ongoing proc fee offer 0.55 per cent commission upfront and then 0.13 per cent per year for up to 15 years providing the broker does an annual customer care call.
