Equity release customers saw more product choice and flexibility in the first six months of 2019 according to the latest Equity Release Council’s Autumn 2019 Market Report.
The range of product options increased two-fold compared to the same time in 2018 to almost 300 options.
A total of £1.85bn in housing wealth was reportedly ‘unlocked’ in H1 2019 by homeowners over-55 to support their later life financial planning.
The top growth areas over the past year include options for sheltered or age-restricted accommodation, downsizing protection and drawdown facilities.
David Burrowes, chairman of the Equity Release Council, said: “The equity release market is responding to consumer demand as it continues to evolve and grow.
“Increased product innovation and flexibility are helping to meet wide range of financial and social needs, from providing extra retirement income to passing on wealth to younger generations.
“Older homeowners considering equity release have never before had more choice and flexibility to meet their changing needs and their families’, with average rates also at record lows.
“A broader range of products means equity release can play an important part of advisers’ toolkit when considering clients’ requirements in later life.
“It’s vital that advisers across a host of areas – including pensions and wealth management – can identify when equity release may or may not be suitable based on today’s product range and can refer a client for specialist advice where appropriate.”
Product options offering the ability to make regular interest payments increased to 81 in August which is a 80% increase since the start of the year.
There has been also been a 269% rise in product options available on sheltered and/or restricted accommodation, whilst the range of options offering downsizing protection have doubled.
The report showed the average equity release rate at a record low of 4.91%.
Over half of these products offer a rate of 5% or less, whilst a fifth of products are priced at 4% or below.
Burrowes added: “The market’s development has been driven by competition, reinforced by robust consumer protections and product safeguards.
“As the UK’s ageing population continues to grow, making use of housing wealth will be essential to help all generations meet the financial challenges they’re facing both today and tomorrow.”
Stuart Wilson, corporate marketing director at more 2 life, comments on the key trends seen in the later life lending market following the ERC’s report.
Wilson said: “As revealed by today’s Equity Release Council Autumn Market Report, increased product choice, flexibility and falling equity release rates have been standout trends for the later life lending market in 2019.
“It is clear that lenders are listening to the needs and demands of consumers to innovate and bring greater product choice to the market, with borrowers now having a vast range of options at their fingertips to help support their later life financial planning.
“Today’s retirees face longer and more active retirements than the generations before them, so we need to ensure that the equity release market continues to cater to their changing needs through product innovation.
“To this end, we need to work together with advisers to understand what consumers expect from later life products and provide them with product options that give them the flexibility they want and deserve in retirement.”
Will Hale, chief executive of Key, added: “Over the past twelve months, we have seen the number of equity release plans on the market more than double alongside continued innovation in the broader later life lending market.
“While the ever expanding range of options is good news for the customers, with great choice comes great responsibility.
“It is now more important than ever for customers to ensure that they speak to a specialist adviser who knows the later life lending market inside out.”
Mark Gregory, founder and chief executive of Equity Release Supermarket, commented: “We have witnessed continued record growth in the first two months of Q3, with year-on-year applications submitted to lenders up 22% and our figures have showed that customer interest is still very much thriving.
“At Equity Release Supermarket, we haven’t been impacted like the wider market and have enjoyed record growth year-on-year.”