Speaking on the Masterclass, Greg Cunnington, chief operating officer at LDN Finance and LDN Private Clients, said that the firm had entered later life lending around three months ago, now offering retirement interest-only and other later life options.
He said it was crucial for mortgage brokers to “to be holistic and not pigeonhole customers, so don’t tell customers ‘this needs to be an equity release or RIO’”.
He said: “That’s what the FCA review wants, so I think there is some scepticism that maybe there are some firms historically who have tried to steer people into equity release because of the higher procuration fees, but I think for mortgage intermediaries, as long as we ignore that, it’s certainly nothing we’ve seen, and it’s been quite a good market.”
Earlier in the year, the regulator found that some firms’ advice was below expected standards, with a senior FCA figure later saying personalisation, probing assumptions and providing evidence were key areas for improvement.
Going on to clientele, he said that the firm had seen a lot of clients from its own book and other firms referring into it, where clients were aged around 74 to 75 and were coming to the end of their mortgage which still had 15 per cent loan to value (LTV) remaining.
He said that this kind of customer had initially planned to downsize but now they were in the family home, they did not want to leave and wanted to explore their options.
“We’re seeing a lot of equity release on that basis, and I think that’s where the market will go,” Cunnington added.
He said that firms who relied on equity release had had a “really challenging year”, with the market forecasting around £6bn in business, but bringing in £2bn.
However, Cunnington said that as a new entrant it’s been “genuinely interesting” and would be a “growing area for the firm”.
He continued that as pricing improves this would improve borrowing capability, noting that rates now sat around the five per cent market, down from around seven per cent a few months ago.
The 46:56 session covered mortgage pricing, buy-to-let market, later life lending and Consumer Duty. The session is hosted by Anna Sagar, reporter at Mortgage Solutions, and Shekina Tuahene, commercial editor at Mortgage Solutions. The expert panel included Greg Cunnington, chief operating officer at LDN Finance and LDN Private Clients, Jodi Spreadbury, senior mortgage and protection adviser and head of lender relations at The Mortgage Broker and Karl Wilkinson, founder and CEO of Access Financial Services.
