REVIEW
EQUITY RELEASE
The far future of equity release Andrea Rozario chief corporate officer, Bower
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t’s been an odd couple of years. Never again (I hope) will we all experience such stress, tedium, and anxiety simultaneously. Two years on, and changes from the lockdown launching, and it seems like we are finally heading back into normal times. Masks seem to be a novelty again, and after numerous false dawns it feels like life, and indeed business, are back – for good, one hopes. For my corner of the mortgage trade – equity release – the lockdown was a time of consolidation. After a number of years of really impressive growth, coronavirus threatened to knock us back. However, in reality, the market has stayed steady, and this year started like a train. In Q1 of 2022, £1.4bn was released, a very healthy 30 per cent hike from the year before, and the market seems to be cruising toward cracking £5bn released annually for the first time.1 But what’s the bigger picture? Growth is key to any market, especially one that is, admittedly, a smaller piece of a much larger pie, but it can never be the be-all and end-all. The main thing for market success is to focus on the future – not just one year at a time, but the distant future. How will equity release be placed in many decades’ time? How will we be helping older homeowners in the future realise the retirement they deserve? The answer is to bin shorttermism. Equity release is here to stay, so we should act like it. In fact, looking forward cements our place as a retirement solution of the future. In truth, the retirement environment www.mortgageintroducer.com
is set to change dramatically. Everybody knows that the country is greying – but do you know how much? Apparently, around one per cent of people born in 1908 lived to 100 years old; but as many as a third of people born in 2012 will hit triple digits.2 With so many more elderly people around, new retirement finance solutions will be essential. And equity release will have a role to play – I am quite sure of that. So what are the big-picture issues we can focus on now to ensure our industry will be well placed to service the retirees of the future? Well, first is customer protection. If we look after the customers of today, it will inevitably be easier to handle those of tomorrow. Customer protection should be at the heart of everything we have done, are doing, and will do
in the future. And we are demonstrating that more and more. The recent Equity Release Council announcement of another consumer standard – namely, the right of every customer to make penalty-free partial repayments on every council-backed lifetime mortgage – is another step in the right direction. But let’s make strides now so that steps in the future will be far easier. M I *1 https://www.mortgagefinancegazette. com/lending-news/equity-release/ value-equity-release-hit-newrecord-q1-rising-30-5-key-laterlife-25-05-2022/#:~:text=In%20 Q1%202022%2C%20customers%20 could,compared%20to%2010%20years%20ago. 2 https://21stcenturychallenges.org/ britains-greying-population/ JULY 2022 MORTGAGE INTRODUCER
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