This last quarter has shot by and probably means I can officially no longer caveat my opening words with being the “new” Chairman. I am not sure when I become the “old” Chairman but of course time will tell! What is both old and new is the record level of customers for the last quarter, as well as the continued increase in the value of lending as housing wealth continues to play a more prominent role in financial planning for retirement. With the industry projected to have around 44,000 customers and £4 billion lending in 2018, it is not surprising that more people are sitting up and taking notice.
It is an exciting time to be chairing the Council as there has never been so much choice in the later life lending market. Our Spring Market Report highlighted that Equity Release is attracting twice as many new customers as five years ago and the range of product options has grown 25% year-on-year (totalling 86), as rates continue to fall.
The recent technical rule change by the FCA to reclassify Retirement Interest Only Mortgages has not only given us a new acronym (RIO Mortgages) but has also added to the range of product options which will provide consumers with more choice. Ultimately, there is not a one-size-fits-all solution to later life financial planning and it is important that all parts of the industry provide the best possible outcomes for consumers. A key part of the Council’s strategy is to lead in setting high standards for later life lending products drawing upon recognised guarantees for consumers as well as ensuring they are fit for purpose. We welcome the commitment of the FCA at our last meeting to work with the Council over the next months across issues of consumers’ affordability, longevity and vulnerability.
The growth of the market and the good work of the Council has brought us to the attention of policymakers. For example, constructive meetings have taken place with MPs and the Government in relation to the implementation of Solvency 11, and the role of equity release in support of sustainable funding for social care. We look forward to sharing the outcome of the latter discussions for further debate at our Parliamentary event in July.
It has been a pleasure to meet members during my road trip across the UK with our indefatigable COO, Donna Bathgate, and experience the shared enthusiasm and commitment to good customer outcomes. Our task is to represent the same passion and drive, as we engage with trade and mainstream media who are growing in their positive interest in equity release. We look forward to seeing you at the many conferences and visits planned this year if not at our AGM on 25th April.
I hope you find this newsletter interesting and informative. Please let us know your views and feedback.
With best wishes
David Burrowes
Chairman, Equity Release Council
