These factors include products fulfilling a growing consumer need (58%), the high level of regulation (21%) and increasing political awareness of the importance of equity release (5%). In addition, SHIP’s strong code of conduct was considered a strength by 32% of respondents.
The findings of this SHIP survey – which represents over 90% of the equity release market – highlights the fact that whilst providers are hopeful for the future of the sector there is still some feeling that negative perception of the industry is stopping industry participants and consumers from becoming more involved.
Indeed, 38% of those who answered the survey saw reputation as the biggest challenge that providers needed to overcome when speaking to consumers, funders and intermediaries. The second largest challenge – cited by 25% of respondents – was the fact that providing funding for this sector had yet to become a priority for many institutions.
The majority of providers believed that 2010 would be a challenging year with 80% believing that the market will stay at 2009 levels rather than shrink. Other predictions for 2010 included the belief that additional funding streams will open up (60%), the government will become more involved in the market (60%) and new entrants may enter the market (40%).
Andrea Rozario, director general of SHIP, the equity release trade body, commented: “The equity release industry has developed considerably over the years and has strong safeguards in place to protect consumers and intermediaries. It is a concern that our members still find that a negative perception of equity release is affecting the number of consumers who can benefit from these products.
“There will be more than 18 million over 55s in the UK by 2011 – many with insufficient retirement savings but significant housing equity – therefore it is vital that consumers have the confidence to speak to an expert about equity release rather than struggle to survive.
“On a more positive note, given lack of funding has been a serious issue for some of our members we are pleased to see that many providers feel additional funding will be achieved in 2010. With more and more institutions looking for solid long term investments, we hope that more will take a serious look at the benefits of equity release assets.
“We are also delighted to see that our members believe that 2010 will be the year when the government will become more involved. We have campaigned long and hard for all political parties and relevant Government departments to seriously consider the role of equity release in easing the retirement funding crisis and are confident that this is the year when we will see concrete results.”