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How is your equity release business doing?

Journalist: Jane Matthews, FTAdviser

ended 07. June 2023

Hello advisers, 

I'm eager to hear from equity release advisers please. 

According to data from Moneyfacts there has been a collapse in the product choice of lifetime mortgages since the mini Budget in September last year. 

There were 597 at the start of Sept 2022. At the start of this year there were 179, which has moved up to 264 at the start of this month. 

I'm curious to hear if this has been a noticeable shift for you or do you think there is adequate choice in the market at the moment? 

More generally, how is the equity release and lifetime mortgages side of your business doing at the moment and what is driving it? 

Many thanks, 
Jane

 

4 responses from the Newspage community

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Jed Newton
Director at Trinity Financial
The lifetime mortgage sector is suffering from an existential crisis, the rates are so high the products do not work for any clients other than people with no other options. The impact of the pricing makes the roil up of interest horrendous over time. Without a significant decrease in interest rates these products are not remotely appealing and in many cases recommending them would not be in the client’s best interest.
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Paul Neal
Mortgages & Equity Release Advisor at First Choice Financial Services
At the moment a combination of high interest rates and low loan-to-values are making Equity release an unpopular product. As a broker, it is difficult to recommend something that is so poor.
We have seen a very slight increase in enquiries lead by the increased costs in living, but equity release is now being seen more of a necessity to live rather than a nice to have
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Mark Stallard
Director and Advisor at House and Holiday Home Mortgages
Yes, it's been a rocky road recently, with lenders cutting back their equity release products since last year. Especially in the Higher Loan to Value and more difficult criteria areas.

But that doesn't mean lenders aren't still around and in fact, I find myself having more and more conversations about the subject these days. People are interested so realistically, despite the challenges, it's still a mountain some are wanting to climb. Even though there are fewer routes to choose from and there's plenty of scree to scramble over, it's there for those who set their mind on it.
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Luke Thompson
Director at PAB Wealth Management
The choice is definitely restricted at the minute and this is causing issues for customers, especially with the much higher rates we have been experiencing. It is becoming more difficult to place all but the most vanilla of equity release cases as anyone who is looking to borrow a larger amount is finding that the potential costs of the roll-up interest are putting them off.

There will always be a market for equity release, especially for those customers who are coming to the end of their interest-only mortgages and we are still receiving a good number of equity release enquiries. However, we have noticed that there are definitely not as many customers who are looking to raise funds via equity release for 'lifestyle' reasons as they feel the interest costs are prohibitive at the minute.