Converting Intrigue to Investment in Equity Release

How many of us thought Covid would last this long? I certainly didn’t expect it to rumble on quite so much when it all kicked off last year (or was it the year before that?!). So, it’s certainly a relief to me, and millions of others I’m sure, that this rollercoaster decade seems to be showing signs of calming down. Most of us are vaccinated and many are even getting booster shots; the fun and games of the traffic light system for travel has all but ended and even transatlantic flights have restarted, so finally it feels like we may be on the homeward stretch of all this drama. And this positivity is being reflected in people’s financial decisions and considerations.

For most businesses, the pandemic has been a minefield and tons of sectors – tourism, the arts and, of course, the humble pub – have struggled immensely. However, the mortgage arena has been going strong and the equity release corner of the market has also found a way to grow. In fact, after a steady period earlier in the year, the market appears to be making up for lost time and in Q3 a massive £1.049 billion was released from customers’ homes, representing a very healthy 18.8% bump from the same period last year.[1] What’s more, this very solid third quarter has put equity release on track to once again smash annual lending records, with a predicted £4 billion being released in 2021 – the first time this figure has ever been reached.

Now, this may not be particularly interesting to your everyday client or equity release rookie, but to myself and those of us who have been surrounded by the lifetime mortgage for some time this news is significant. It wasn’t that long ago that we were heralding £1 billion a year as something worth celebrating – just 8 years ago in fact – and now it’s taking a quarter of the time. But this doesn’t mean we can rest on our laurels. In this very publication some three years ago I agreed with Dave Harris, CEO of more2life, when he predicted that lending could accelerate to ‘£1bn a month in the next five years.’[2] So, despite the success I still think we need to go much further to get close to this rather confident 2018 prediction.

One of the key ways we will do that is by reversing some of the negative sentiment and confusion still prevalent within our customer base. According to recent survey data released by Boon Brokers, some ‘67% of homeowners aged over 55 admit they are not confident about what equity release is and how it works’.[3] So, whilst equity release is growing and setting records, the majority of people – a worrying two-thirds plus, in fact – still don’t understand the modern market. This needs to change.

If we are going to reach the £1bn a month target we boldly set pre-pandemic, reversing this confusion will have to be at the heart of everything we do. The data from Boon Brokers goes further still, claiming that the internet search ‘is equity release a good idea?’ has shot up 350% in the past year[4]. So why don’t a majority of older homeowners feel confident about our market? The interest is there, but not the knowledge. And herein lies the problem.

Simply asking Jeeves what to do will not help people make their minds up about our often complex industry. Professional advice direct from an adviser who can use their skills, experience and know-how to deliver a tailored package of advice will always blow Google and Bing out of the water.

Ultimately, we are still chipping away at a negative attitude that has been cemented by the press and our market’s unfortunate past. Today, equity release is layered with safeguards, customer protections and tools to ensure that customers are treated fairly – but this is too often glossed over in the mainstream media.

Equity release, as we have seen, is becoming a far more intriguing option for many, but we need to help potential customers step away from the search bar and into the diary of an experienced adviser. If we can make this connection, the industry could quickly eclipse this £4 billion a year benchmark and look to £1 billion a month as the next goal. Time to get to work. 




[4] ibid