Photograph of Andrea Rozario, the author of this document.

Reasons to remain Confident in the Equity Release Market

The results are in for the first quarter of 2021 and the equity release market has had a dip. According to data from the Equity Release Council, Q1 2021 saw £1.14bn released by 16,527 new or returning customers, a very slight decline from the £1.16bn released in the final three months of 2020. So, we’re hardly talking about a cataclysmic drop off here. In fact, it is heartening that even the smallest of dips seems to cause alarm – after all, we aren’t overly used to the numbers going down.

Rather than causing any sort of panic or worry, these numbers actually give me a lot of confidence. We are in the midst of a global pandemic and so many industries are going backwards in a hurry, and yet here we are – steady eddie. I can only echo the Chairman of The Equity Release Council, David Burrows’, words when he said that these figures prove the market to be ‘robust’. But I also think these figures should lead to some perspective too.

In just three months, and all while the country as well as the world struggles through one of the biggest downturns in recorded history, our market has matched the annual lending of just a few years ago. Breaking the billion barrier back in 2013 was something to be celebrated after 12 months of hard work and graft, but now we surpass that virtually every quarter regardless of what is happening in the world. Yes, we always want to be growing, but a little pause hurts no one. Plus, year-on-year these figures actually represent a 7% increase so things are still heading in the right direction.

So what of the future? Will we be plodding along at the same rate for a while still? It is hard to know the answer for definite and I for one have certainly learned not to second guess the pandemic and, more specifically, the government’s response. But I have a strong suspicion that if we hit the June 21st target there will be a release of pent up demand throughout not just our own industry, but pretty much every industry. I predict that the tail end of 2021 will be setting new records and give equity release the springboard it needs to go to new heights. The important thing now is to be prepared.

There is more choice in modern equity release than ever before, but when things fully open up again I would love to see more lenders and major names get involved. We have the product variety, but some further heavyweight high street names will give customers the confidence they need to explore the lifetime mortgage more vigorously. If my prediction comes to fruition, now would be the perfect time for some new lenders to get involved.

Secondly, as a focus for the second half of the year, I hope the drive continues to get equity release the mainstream acceptance it deserves. It is great seeing so many adverts on the TV for equity release, but I would love to get us to go from daytime to prime time. Equity release needs to be discussed as a serious alternative and giving older homeowners the knowledge and tools to make these decisions is absolutely critical, so more accurate and balanced focus from newspapers and mainstream media outlets is essential.

Ultimately, the solidity of the equity release industry keeps me in high spirits. With so many different businesses struggling at the moment, it is emboldening and motivating that we are remaining so stable. But more than that, I am glad that we can continue to offer our customers the advice, help and products they need to make their life & finances more manageable in these difficult times. I think, once we are out of this pandemic and normal life returns, we will be blowing by all previous records and can set our sights firmly on mainstream acceptance.