The equity release tide could finally be turning
Peter Welch is head of sales and distribution at Bridgewater Equity Release
Along with ensuring that Bridgewater remains competitive, one of my key responsibilities is helping develop and increase the profile of the equity release sector as a whole. This is not always a straightforward process; over the years it has often felt as if I and my contemporaries were banging our heads against brick walls at times.
However in today’s environment it genuinely feels as if some real progress is being made after a series of exciting developments of late rounded off by some encouraging research I encountered recently.
Conducted by LV=, it suggested that equity release was on the verge of becoming a mainstream product with 86% of financial advisers considering it a significant future growth area for their business and more than half of respondents reporting an increase in customer interest. As to what was driving this surge in enquiries, advisers attributed it mainly to pensions shortfalls, but also pointed to rising debts, mortgage and otherwise, and the need to fund long-term care.
One of the main findings of the survey that certainly tallies with what we have been experiencing at Bridgewater is a shift in the perception of equity release and what it can be used for. From being considered solely as a means of funding a conservatory or a luxury such as a new car or a cruise, it is now being viewed as a viable method of helping homeowners pay for everyday expenses and meeting the cost of care and medical treatment in old age.
These findings came hard on the heels of the encouraging comments made by the Financial Services Authority’s Martin Wheatley that I covered off in a previous column and the successful parliamentary launch of The Smith Institute’s guide into making the most of equity release.
Backed by a number of key industry stakeholders and received warmly by a number of influential politicians, the report proved that equity release can contribute towards the costs of social care and helped dispel some of the myths and misconceptions harboured by some homeowners and financial advisers. As well as positioning equity release in front of key decision makers, the publication also highlighted the willingness of all those involved in the sector to be proactive in moving it forward.
A further indication of this enthusiasm is the imminent rebranding of our sector’s trade body Safe Home Income Plans. Far from being just a fresh lick of paint, this is a concerted push from everyone within the industry to capitalise on the wave of optimism that currently surrounds equity release and help drive it to the next level.
While this will be undoubtedly be dependent on advisers being complicit and increasing customer awareness of the benefits that equity release can bring, I am convinced that this can help the products and the sector as a whole achieve the mainstream status it deserves.
For far too long we as a nation have failed to tap into the housing wealth we have amassed throughout our lives and, with an ageing population beset with financial worries we have ignored one, potentially, ready-made solution. The tide could finally be turning and it’s about time too.