November 24, 2021

Experts have their say on our Q3 market data

Homeowners are set to take out more than £4bn in equity release this year for the first time on record, according to our Q3 market report published in October. Read what some of the leading industry experts had to say below. 

Stephen Lowe, group communications director at retirement specialist Just Group, said the figures point to a market that is rebounding from last year’s lockdowns and returning to growth.  

He said: “Total lending in the first three quarters of this year is running 20% above the best pre-pandemic year and on course to reach a new record. 

“We are confident that the appetite for using housing wealth in later life will continue growing to meet common needs such as generating extra income, gifting cash to loved ones, paying for care or helping with estate planning. 

Developments such as the wider introduction of medical underwriting, which our figures show could help six in 10-lifetime mortgage borrowers achieve better deals, illustrate the innovation and competition prevalent in this market which are clear signs of a healthy market meeting the needs of its customers.” 

Simon Gray, managing director at equity release advisory firm HUB Financial Solutions, said the report showed demand is picking up and providers are keen to meet customer interest.  

He added: “This is driving competition and new choices and options, such as the introduction of medical underwriting which we expect will become the norm. 

“The long-term nature of the decision to release equity and the increasing choice of products in the market underlines the importance of high-quality professional advice. Good financial advisers always seek to really understand customers’ objectives and to tailor solutions to each customer’s unique objectives.” 

Dave Harris, CEO, more2life, said it was “fantastic” to see the lifetime mortgage market supporting a growing number of borrowers, with total lending up by almost a fifth.He said: “The figures are particularly promising as the market looks set for a recordbreaking year of activity with lending on course to reach £4bn,if not £4.5bn, for the first time. Greater product choice and flexibility in the market have undoubtedly helped the market go from strength to strength and have allowed more homeowners to access the wealth tied up in their homes. 

“While the value of average new lump sum plans naturally reduced between 2021 Q2 and Q3, in line with the winding down of the Stamp Duty holiday, using equity release to gift a deposit or to buy a forever home remains a popular and attractive option. At more2life, we have seen a steady flow of purchase cases, despite the tax break coming to an end, and expect this to be one of the key lasting impacts of the initiative on the later life lending sector. 

“Whatever the reason for using equity release, whether it’s to boost retirement income, buy a new home or fund home improvements, lenders must keep developing innovative solutions so that both current and future retirees have greater choice at their fingertips. Collaboration between advisers and lenders will also be vital in making sure the later life lending industry is able to meet increasing demand for the rest of the year.”   

Will Hale, Key CEO said the figures highlight the growing confidence older homeowners have in using property wealth as part of financial planning with the market set for a record year. 

 “We’ve already seen a record four consecutive quarters with more than £1 billion lent to new and existing customers in each of these quarters which underlines the strong demand even in the face of the COVID-19 pandemic and economic uncertainty. 

“The Stamp Duty Holiday has definitely been a factor as well as the strength of the housing market but underpinning it all is the commitment to innovation by lenders which is playing a crucial role by offering more flexible options to support advisers and their customers. 

“With Q4 a traditionally strong period for this sector and a certain amount of pent-up demand due to pandemic restrictions, the market looks on track to finish strongly in 2021, potentially edging over the £4.5 billion mark. 

“Borrowing into later life is a simple fact of modern-day society and this focus on providing customers with the products they want and need is helping to cement their role in later life financial planning.” 

Claire Singleton, CEO of Legal & General Home Finance saidthe market is set to provide older homeowners with access to more than £4 billion of property wealth for the first time by the end of this year, largely due to the stamp duty holiday and the effects of the pandemic property boom. 

“Supported by low-interest rates, and an expanding market, lifetime mortgage products have grown in popularity as homeowners look to access additional wealth, either for their own retirement needs or to support loved ones. Flexibility and an increasing range of products, including the option to pay interest, mean attitudes towards equity release are changing. With property continuing to rise in value, many people have seen their home emerge as their most significant asset, moving lifetime mortgages away from a specialist product to an essential element of at-retirement planning.” 

Alice Watson, head of marketing (insurance) at Canada Life said it was great to see the industry-wide figures  that  confirm the high levels of home finance activity we’ve experienced at her firm. She said: “Rising house prices and a proliferation of new, flexible products have led many families to consider equity release for the first time. While equity release is a long-term decision that should always be considered carefully and alongside professional advice, it has a valuable role to play in helping today’s homeowners live the retirement they’ve worked long and hard for.” 

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