Photograph of Andrea Rozario, the author of this document.

Mortgage Introducer

There’s always a risk when talking about a rather specific, somewhat niche part of a broader industry that you create an echo chamber for yourself. I often wonder when writing these columns, what does the regular Joe really think about equity release? Does the average man on the street really know much about our industry? I doubt it. To hit the heights I know we can, reversing this trend must be at the heart of everything we do. There has been a huge growth in the awareness of equity release in the past decade, but we need to push the accelerator and go much further.

What do you think most people would say if they were asked about equity release? I imagine many would still think our business hasn’t changed much in the past 20 years. For those that do back themselves as being clued up on the lifetime mortgage, I’d bet most would trot out the classic ‘expensive last resort’ line. Luckily, I think responses would be very different if you asked actual equity release customers, and we would get a more even-handed review. But herein lies the problem – the average person (i.e the average potential customer) only becomes fully educated on equity release after they get involved, so we need to make sure they know more before they even meet an adviser.

For instance, would most people realise that a number of equity release products now let you service the interest? According to the most recent Equity Release Market Report, distributed quarterly by the Equity Release Council, interest servicing features on new products have risen 80%. The rise of this feature has made modern equity release almost unrecognisable from the market of just a few years ago, but we need to let the people know!

So what about making voluntary or partial payments? Again, this is another feature that I am pretty sure most people would think is not a perk of equity release. And yet, this too is on the rise – up 65%. The industry in 2021 is always looking to give our customers choice and options, so now we need to make the prospective customer well aware of this too.

And speaking of choice, I would love more people throughout society to know that equity release isn’t some kind of monolith. There is so much choice now. In fact, the variety and choice available in modern equity release, especially recently, is staggering. There are over 300 different products available and in just the last year choices for customers have increased by 42%. And this has been a trend over recent years and I can only foresee this continuing and choice growing & growing.

And finally, what about people’s fears and anxiety about using equity release? We have had to deal with a lot of myths and misnomers over the years, and there is still a distance left to travel here. Not enough people know about safeguards that form the bedrock of today’s equity release industry – things like the ‘No Negative Equity Guarantee’ for example need to be better understood prior to any first adviser meeting. But also other safety nets and protections like the ‘Inheritance Guarantee’ that forms a part of so many new plans, which again is another feature on the rise with 20% more lifetime mortgages offering this protection year on year.

Ultimately, equity release is still a fringe concern and the general population are not clued up enough. But they are getting there. This has been a battle of attrition and I imagine it will continue this way, but I can feel the mood changing. Just seeing ads on TV for equity release proves we are knocking on the door of mainstream acceptance, but we need to continue banging the drum. The over-55s population is set to increase by 3 million over the next 15 years, so many more people will be looking at options like this. Giving them all the facts and all the information they deserve to make their own choice is the most important thing for everyone.

If we can get to a place where the lifetime mortgage is talked about in the same breath as a traditional mortgage, we will be on the right road. Once this happens, our little fringe industry will get to the level I know it deserves and needs to be at. Righting wrongs and educating people whenever we can has to be the way we get there.