Property wealth invaluable for later life needs
14 April 2021
Property wealth will be invaluable in meeting people’s financial needs in later life, according to the findings from the Equity Release Council’s Spring 2021 market report.
Despite the Covid-19 pandemic, the number of lifetime mortgages available to homeowners rose to a record 488 by the end of 2020. Meanwhile, the average product rate dropped to 3.95% in January 2021.
The addition of more than 100 equity release plans over the last year was welcomed by experts in the industry, who said the pandemic had failed to slow innovation in the later life lending market.
Stephen Lowe, group communications director at Just Group expects personalised solutions to continue to gather pace going forward.
Lowe said: “We can expect to see this trend accelerating so that every client will get a made-to-measure, personalised solution that is built around their individual needs. The days of an off the shelf mix and match solution are numbered. We are confident of the market’s prospects as property continues to be a major part of most people’s financial assets and using housing equity is becoming a cornerstone of their retirement planning.”
Simon Gray, managing director at HUB Financial Services, echoed the sentiment.
Gray said: “We are able to personalise our solutions now more than ever but we expect this trend to continue so ultimately each client will receive a solution that’s built around their bespoke needs, taking into account their individual risks.”
However, Will Hale, CEO at Key, said while product evolution was important, the bigger picture within the sector was around changing demand and the “growing acceptance” of the role that property has to play in helping people’s financial flexibility.
Key’s own data showed 29% of customers re-financed a mortgage and 22% gifted some or all of the money released.
Hale said: “Equity release is increasingly being used to support families and to improve financial flexibility. Underpinning the growth of the market is specialist advice which is vital to ensure customers look at all their options and arrive at good outcomes. As the industry evolves into a true later life lending market offering innovative products with flexible features there is more choice for customers but also increased complexity hence highlighting the need for better access to information and improved signposting to expert support.”
Harris said: “The statistics are testament to the work of lenders, advisers, trade bodies and other key players in the market who have been working together to ensure that the individuals who have stood to benefit from equity release have been able to access the financing they need during a difficult period. However, as the vaccine roll-out continues apace and lockdown restrictions ease even further, supporting advisers needs to remain a core focus for equity release lenders. This will ensure that this community is well-prepared and equipped to handle customer demand in the coming months.”
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