AMI: Equity release worth £5bn by 2020
Last year the equity release market conducted around £1.4bn of business, but Sinclair reckoned its time has come with an aging population and big-name providers set to join the likes of Legal & General, which entered the market in February 2015 after acquiring New Life Home Finance.
Sinclair said: “The crying need for lifetime and equity release is only going to escalate and the need for advisers in that marketplace is only going to increase.
“What has growth from around and under a £1bn market to close to £1.4bn this year; I can comfortably see it being a £5bn market by the end of this decade.
“I’ve always said that the equity release and lifetime’s time will come and we’re reaching the point now where by necessity it is going to happen.”
He added: “I think we’re going to see more lenders coming to the marketplace which is positive – big names coming to the marketplace is what is required.
“That will get more consumer acceptance that this might be a safe place to be and also it will take away some of the perceived reputational risk that sits in that marketplace.”
Sinclair said product flexibility needs to be worked on, but he praised the stringent ethical standards established by the Equity Release Council.
He said: “I am disappointed sometimes when regulators keep hearing it’s a high risk business.
“This has been just about the safest place that we perform as an industry.
“It’s always the kids later who say they didn’t know anything about it and that’s the challenge we have; to have good advisers who are brave enough to take people through the journey and make sure that… children are brought in and signed up to it so that the damage shocks that always come in… aren’t there.”
He added: “We need more flexibility around lifetime products that morph into equity release and products that have got the ability to do capital repayment, then to interest only, then to amortisation.”
Andrea Rozario, chief corporate officer at Bower Retirement Services, said: “It’s great to see such positivity around equity release and a wider acceptance which is coming from both the industry and clearly the customer as lending continues to increase.
“We have been talking about the dawn of the industry for some years but we are now seeing proof – new lenders, more flexibility and increasing demand.”