Equity Release Newsletter - January 2023

Equity Release Newsletter

The 4 R’s of Equity Release are Release, Repayments, Remortgage & Reassurance. Click this link for more detail https://www.keypartnerships. co.uk/the-4-rs-of-equity-release

Round up

It’s fair to say that we had an absolutely cracking 2022 in the world of Just Mortgages Equity Release. We ended the year with 19 authorised brokers across the country and they wrote 92 new cases which led to over £20,000 paid out in referral fees to you. We received over 130 referrals via the link and over 35% of those led to business with 78% leading to initial appointments. It’s also important to know that 11 of these leads were fed back to the referring adviser when Equity Release was not appropriate but business could be written in the form of a RIO or other mortgage.

I’m sure 12 months ago when we entered 2022 we had hope that we might return to more normal, postpandemic market conditions. We end up starting 2023 in a cost of living crisis, the threat of house price correction and a previous bombshell budget. That and also with Consumer Duty on the horizon means that many brokers might feel under some pressure to generate extra business.

So, with equity release products that are more flexible than ever before and a growing audience from the general public it makes sense that we are able to support you with a place to refer leads you may not have considered sourcing or placing before, all of which can earn that extra revenue for you. Indeed you may even be considering writing equity release business and expanding your offering to your clients – 39% of introducers in the market state that the flexible equity release products allow them to help customers they have never been able to help before.

If you would like to know more about how we can help you gain your licence then read more detail at the end. For those wanting to know more about how to generate more leads, keep reading.

Market Headlines

Equity release borrowers have gifted £2.1bn to children and grandchildren to help them reach their financial goals

Could this type of client be someone you look out for when fact finding? They would certainly make a good referral for you as the information below suggests

Data from Key Later Life Finance assessing the uses of equity release and the amount borrowed found that 17 per cent of the £12.1bn released since January 2020 until now was used for this purpose.

Homeowners in London have put house price growth over the period to use and gifted an average of £168,688 to family members. In total, £616m has been gifted by older homeowners living in the capital.

This is followed by the South East, where an average of £88,588 is given and the South West, where £65,636 is gifted on average.

The smallest amounts are gifted in the North East at £41,483 and Yorkshire and Humber at £42,162.

Across the UK, the typical gifted amount is £75,337 and recipients have an average age of 47. The region with the youngest recipients is London, where the average age is 39 and the oldest is Scotland at 56.

Generating leads

So, where can leads come from?

Currently, there are more than 20.5 million people aged 55 and over in the UK. While the end of the default retirement age means that people are working for longer, they are also enjoying longer retirements. Unfortunately however people’s savings habits have not matched this change to retirement longevity meaning that whilst the state pension will provide a basic income, it is generally agreed that most people will see some shortfall to their income expectations.

One option for many older customers to make up this shortfall is to make use of the considerable value tied up in their properties. While traditionally, people have seen the family home as an inheritance or a nest egg, there is increased acceptance that it may need to help finance part of a person’s later life. A point to consider……..

This suggests that in the future we may see more people looking to release equity and other later life lending options to meet their needs in retirement which raises an interesting question – how will they access this market? The answer is simple – this is where you come in!

This graphic from Key Partnerships tells you where the majority of leads came from in 2021 and 2022. You can see that Mortgage Brokers are the key so read on to see how:

Think about the discussions you can have with your clients when you meet them for the first time. Ask yourself these questions?

? How long do you spend talking about retirement plans with your clients

? Do you delve into what retirement might mean to them and what they want to do with the time

? Do you discuss the future plans your customers might have for their house – what are they really buying it for apart from a place to live right now

Downsizing is seen as the most sensible option for people who wish to release some of their equity in their home, however...

While 29% of over 45s say they are planning to downsize, 48% are not as their home is the right size for them (32%), they are already in their forever hom (25%) and they don’t want to leave the community they are in (23%).

...so this may not be possible for everyone.

Others find that due to their modest property value, the amount the release is eaten up in moving costs (£9,600), legal fees and stamp duty or they are unable to find a suitable property which meets their needs.

Generating leads

? Do you discuss what expenses may arise for your clients in the future – things like maintaining and improving the property, plans for children and grandchildren, what kind of life they want to provide for their families, is university on the cards

? Do you discuss what role their parents play in their lives – maybe Mum & Dad have already talked to them about inheritance or plans to help out with future expenses.

Page 4 showed you a few examples but could lead to conversations that mean you can help them on a wider scale than just arranging their current mortgage. Remember that by mentioning the full range of services you can provide they may well be aware of friends or family or even neighbours who you can help.

Another suggestion is your current client bank. Do you look for any of the following from it:

* Clients aged over 55

* Clients paying off their mortgage

* Clients with interest only mortgages

* Clients struggling with their finances closer to retirement

Indeed, aswell as just looking at your client bank do you speak to your client bank regularly? Do you know what is going on in their lives? Can you capture circumstances in which you may be able to help them that fall outside of just chasing an expiring rate?

Better conversations could bring in a multitude of new opportunities for you and as you would expect, Just Mortgages can help any of you with this as and when you feel you need us #justask.

Lastly, remember there is a suite of Equity Release marketing on SPOS. Telling your clients what you can offer could open the door to many more leads for you.

Equity Release referrals can earn you some serious money.

Example fees paid out in 2022 are amongst:

* £800 to a broker in Cheshire for referring her next door neighbour who wanted to help her family with university accommodation.

* £1,250 paid to a broker in the Northamptonshire area for referring a client she couldn’t help otherwise.

* £2,700 paid to a broker in the Coventry area for a lead that led to 2 mortgages getting the client out of a debt consolidation situation that no other solution would solve.

* £960 paid to a broker in Leeds for a client who didn’t even know that Equity Release was an option for repaying their interest only mortgage.

Meet the team

When I started Heart and Home Mortgages I always knew I wanted to do equity release.  It’s a real joy to help clients explore their options.  It can be very moving and in nearly all cases spreads a lot of joy and happiness by making life a lot easier for my clients.

If I look back over my last cases the two that stand out for me.  My clients were desperate to move closer to their children in retirement but couldn’t as it was a more expensive area.  They took an equity release mortgage and moved into a slightly more expensive area to be near their family and spend time with their grandchildren.

Prior to that one of my clients was retirement age but needed to work to carry on paying the mortgage.  After being diagnosed with cancer and getting the all clear after treatment he was desperate to retire.  So they paid off the mortgage with equity release and booked a lifetime dream cruise.  They decided they wanted to spend time together, not spend it working through their retirement.

It’s always a pleasure helping, whatever the reason.

I started studying for Equity Release during lockdown! I really enjoyed the study material and learning about the benefits it can bring to people looking to unlock equity within their property.

It’s amazing to think about how many people have so much wealth in assets and little or no cash in savings and having assisted customers over the past couple of years it really is a pleasure to see how it can benefit not only the customers applying for Equity Release but their families also.

The majority of referrals to myself are from other advisors based in Scotland and I will always travel to meet clients face to face for all appointments to ensure they are comfortable with the process and put their minds at ease. Normally I do all my appointments over Video, so I have to remind myself not to go out with my tracksuit bottoms on and shirt and tie!

I have recently joined up with two local bowling clubs to provide some advertising. Whilst it’s not the weather for bowling just now in Scotland I’m hoping this will generate some business next summer. In the meantime, I don’t mind dropping into the “Social Club” to show a presence!

Lucy Watts

Brian Telfer

Meet the team

I have been in the industry since 2001, thanks to my flexible hours I am able to enjoy playing squash still at 52, play 5 a side football and long walks with the boy Joe, the four legged version that is!

I’ve chosen the Equity Release route as I believe it is another level into my clients financial DNA and from my point of view is another tool in the box to be able to help people. It’s taken off really well for me and I really enjoy this licence – I feel like I am adding value to someone’s life and I feel very privileged to be able to help what we would call vulnerable customers make their financial situations better and more suitable for them – they have worked hard for their property all their lives so it’s nice to be able to facilitate that property paying them back.

Central to the success I’ve had this year is the support from the JM advisers and their referrals – they are very valuable to me and the customers. But for you as the referring, put simply, the bottom line is that a typical referral is worth north of £500 for what could be a 5 minute conversation for you.

Iain McKechnie

So what’s ahead for 2023?

It’s systems go for 2023 already. Preeti Ferrier representing the Midlands and Ben Peart representing the South have joined the project team and are already bringing some great ideas to the table.

Just Mortgages is also joining the Equity Release Council which is a huge accolade in the ER market. For those that don’t know, the council was set up to protect homeowner interests and to promote high standards in the equity release sector. As members we will work alongside them to build understanding and confidence in the sector. The Council is the representative trade body for UK Equity Release with hundreds of firms registered which include financial advisers, solicitors, lenders and surveyors etc. We are delighted to be taking this step and are very confident that our membership will help you gain more leads and therefore more help for your customers. Afterall, we know how important your reputation is to you, ours is too.

We will be doing more work on marketing and external lead sources in 2023 and of course the doors are always open for those amongst you that are considering getting the licence yourselves. There are 2 routes available to you as follows:

The first is for those who do not have the qualification. You can either go and get it yourselves via the LIBF or you can take advantage of the internal training program that Just Mortgages has on offer. This program includes study help, test papers and weekly

video meetings to help you gain your knowledge. The cost of the exam is also included which you can book at your leisure at the end of the study program.

The second is for those who already have the qualification. We hold induction training and licensing and then offer you a whole host of benefits to gaining and maintaining the licence. We know we have a unique proposition so if anyone would like any further information on either of these programs then please contact any member of the Equity Release Team or your fully briefed Area Director.

So to close our 2023 plan summary we are looking at the future, the opportunities on the table for all of us and the support we can offer to all of you either by servicing your leads or helping with your licence. Our newsletters will continue to keep you updated and our doors are always open for anything you want to know.

Thank you for your support in 2022 and remember that to refer Equity Release business you simply complete this link: https://just-mortgages-equityrelease-referral.paperform.co/ or scan this QR code:

Preeti Ferrier Ben Peart Ashley Edwards

Ashley Edwards