Legal & General Home Finance and Key have voiced their support for the Equity Release Council’s (ERC) modification of rules on face-to-face legal advice in the face of the coronavirus lockdown.
The changes include relaxing the demand for in-person meetings, which are currently impossible due to social distancing rules.
Responding to the announcement, Will Hale, CEO of Key, said: “At the moment, the later life lending sector and the wider UK mortgage market are facing significant challenges.
“While face to face independent legal advice is one of the cornerstones of the Equity Release Councils standards, in a world of social distancing and with some customers falling into groups considered as being at increased risk, this may just not be practical in many cases given the current situation.
“We are delighted to see the industry working together to ensure that we can help those customers who need support while ensuring that we maintain appropriate advice safeguards.”
Claire Singleton (pictured), CEO of Legal & General Home Finance, agreed: “We are pleased that the Equity Release Council, in collaboration with the industry, has secured a solution for borrowers to access remote legal advice on equity release applications, during this period of lockdown.
“The move announced today is a great example of an industry working together to swiftly adapt to the current climate, so that we can continue to support both our end customers and the adviser community, while ensuring an essential product is available to customers at this time.”
Legal advice can now be provided to clients remotely, via a combination of written, video and telephone meetings.
The change was made following consultation with members of the ERC and the wider industry, supported by the ERC’s Standards Board, and will revert once the UK lockdown is lifted.
Singleton added that Legal & General Home Finance is working to ensure that the impact of the coronavirus lockdown on its services is minimal.
“In common with much of the market, we have stopped physical valuations, and will now be offering desktop valuations for all of our lifetime mortgages,” she said.
“These will be done by an independent valuer, using publicly available information to assess the value of clients’ homes.
“These will be less accurate than physically visiting a property, so we’ll use 95% of the desktop valuation when we calculate how much we can lend. These will be just for our information, and won’t change the loan amount.
“We’re also allowing [Optional Payment Lifetime Mortgage (OPLM)] customers to miss up to three monthly interest payments, without these counting towards their six missed payments, allowed in the product terms.
“I hope this will help any customer who finds themselves in financial difficulty due to COVID-19.”