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Trends in the equity release market

Journalist: Jake Carter, Mortgage Introducer

ended 14. February 2024

What are the current trends in the equity release market?

How buoyant is the equity release market at present?

What are your expectations for the equity release market in 2023?

What are the challenges in the market right now?

4 responses from the Newspage community

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Simon Bridgland
Director at Charwin Private Clients
Enquiries are continuing to grow with needs based reasons such as repaying interest only mortgages being the main reason behind them. This trend is set to continue through out 2024 given the number of interest only mortgages forecast to end this year being a little under 80,000 that leaves a lot of people needing to find an answer to their problems very quickly.
Feeling among lenders and brokers I've been speaking with is pretty positive that business levels will be better than last year, although not as high as 2022, mainly due to higher rates and lower loan to values.
I would expect further innovation in 2024 with providers such as L&G and Livemore leading the way. If consumers show enough demand then the providers will as much as is possible, look to create a product to service that need.
The challenge continues to be loan to value, with roughly £90-95bn of inerest only mortgages owing upto 50% LTV and roughly half as much again over 50%LTV, therein lies the problem.
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Rowan Frayling
Managing Director at J Finance
The later life lending market has certainly burst back into life following a fairly flat 2023, we have personally seen almost as many enquiries in January 24 than 23 as a whole.

The releases are still mostly needs based rather than aspirational, e.g. clearing interest only mortgages and helping family members rather than for holidays and home improvements.

I expect the market to continue to pick up, rates may fluctuate but product innovation is key, such as the interest serviced options that several lenders have released or, I am told, are working on.

The challenges as always are higher rates and lower loan to values compared to a few years back however overall this is less of an issue that it once was.
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Stuart Powell
Managing Director at Advice Guru
The biggest trend in 2024 in the equity release market is that it is no longer an equity release market!
Already in 2024, 40% of equity release lenders have brought out new products with revolutionary features that defy traditional equity release stereotypes.
Aware that consumers need higher Loan to Values and with the FCA (via Consumer Duty and market reviews) insistent on affordability checks for all consumers, these hybrid products are long overdue.

Mr and Mrs X from Kingsbrige, Devon saved £5400 over the expected term of their mortgage simply by agreeing to pay the interest which led to a 0.45% rate reduction.

By all means call me to discuss this. Stuart 07773 422220
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Chris Little
Chief Revenue Officer at finova
Lenders are shifting towards expanding products and offering flexible payment options, addressing evolving client needs and the stigma associated with traditional lifetime mortgages.

One development is the increasing flexibility for customers to make partial/full interest payments and ad hoc payments. This approach allows borrowers greater control over financial commitments and mitigates the compounding effect of interest that can accrue over time.

Despite positive momentum, challenges persist. Technological advancements are crucial for managing voluntary and ad hoc payments. The market demands innovative solutions enabling seamless design and implementation of flexible products.

Looking to 2024 and beyond, the equity release market's success depends on overcoming these challenges. With the right technological infrastructure, lenders can create innovative products aligning with customer needs.