The equity release industry has responded positively to Nationwide’s entrance into the market.
The consensus is that having such a big name will raise the profile of the industry, drive costs down and stimulate innovation amongst providers.
Steve Ellis, managing director, Legal & General Home Finance, which entered the market to similar fanfare in 2015, said: “It’s also clear evidence that releasing housing equity is no longer a last resort, but part of the mainstream conversation for supporting a greater financial security in retirement.
“More competition can only be good for both the sector and customers, who will benefit from greater choice when it comes accessing the pensions they never knew they had.
“The entry of another heritage brand into this market will also spur innovation from providers as they develop products that offer even more flexibility and value for money for customers.
“We would like to take this opportunity to welcome Nationwide into this rapidly growing market that helps to support Britain’s retirees with their later life plans and which we believe has a bright future ahead of it.”
Nationwide has joined the Equity Release Council, the industry trade body which has upheld the industry’s high standard of lending in recent years.
Its chairman, Nigel Waterson, said: “We welcome this latest sign of closer links between the residential and lifetime mortgage markets.
“Housing equity is often people’s greatest asset and should be on everyone’s checklist to consider as a potential source of finance in later life.
“This development will bring further choice to a growing, innovative market where consumers’ product options have more than doubled in the last three years.
“It will also help to raise general awareness among UK homeowners about equity release as a mainstream option to consider as part of their later life financial plans.”
Alice Watson, head of marketing at Retirement Advantage Equity Release, was similarly optimistic but had cautious words for the industry.
She said: “The growth in the attractiveness of the equity release market is fantastic to see, but we must not rest on our laurels.
“The cornerstone of the market’s recent boom has been product development and finding innovative new ways to meet evolving customer needs.
“We must ensure providers continue to do this, to provide the best customer outcomes possible.”
Nationwide is distributing its products exclusively through Age Solutions.
The society is offering lifetime mortgage products priced between 3.8% and 4.8% for 55 to 84 year olds, with loans being available up to 46% loan-to-value.
Tim Loy, chief executive of the Age Partnership Group, parent of Age Solutions, said: “Industry leaders such as Nationwide, a trusted brand with a reputation for value and fairness recognising that equity release provides consumers with a greater range of options for borrowing in later life is hugely positive.
“We hope that coupled with our higher quality specialist advice, we can further strengthen consumer confidence and continue to drive forward the equity release market.”
Even those outside the equity release industry have sat up and taken notice at the news of Nationwide’s entrance.
Alex Hammond, head of marketing at specialist mortgage lender Castle Trust, said: “This could mark the turning point in the equity release market.
“The presence of a major high street lender, and a mutual one, will make many more people consider this avenue as a legitimate choice.”
Equity release is a growing market, as there was £2.1bn of lending in 2016, a 26% increase on 2015.
Some commentators, including more 2 life’s channel marketing director Stuart Wilson, have predicted lending surpassing £3bn this year.