Increasing competition and choice is fuelling the surge in demand for equity release products, analysis by Key Partnerships has shown.
With a record 66 different schemes or variants now available, director at Key Partnerships, Will Hale has welcomed the development.
He said: “Increasing competition and choice in the equity release market is a welcome development as continuing demand demonstrates how important property wealth is to meeting customers’ retirement needs.
“The launch of new lenders such as OneFamily and Legal & General expands the choice on offer and increases the need for specialist advice to ensure clients achieve the best possible outcomes.”
However Hale believes the lack of robust sourcing tools is highlighting the increasing complexity for advisers working in the market.
He added: “Advisers who do not regularly work in the equity release market will struggle to keep up to date with the pace of change. Working with a specialist referral service removes all the regulatory and compliance worries while enabling them to maintain a valuable client relationship.”
New plans available include improved loan-to-value offers for customers with lifestyle or health conditions as well as plans enabling customers to pay interest on loans, either regularly or ad hoc, if they want in addition to traditional drawdown and lifetime mortgages.
The expansion of choice has driven different approaches to early redemption charges for customers repaying loans early or moving house.
Key Partnerships analysis reveals that there are now 12 early repayment charge structures.
Charges can range from as much as 25% of the original loan for the life of the loan to fees for fixed periods on sliding scales with many providers not charging fees in some circumstances.