Nationwide ponders equity release move

The Nationwide Building Society has admitted it is considering a move into the equity release market following the merger with the Portman Building Society reports Financial Adviser (26/10/06).

Tim Hughes, head of intermediary markets for the Nationwide, said the society had been undertaking a thorough review of the sector.

"The research we have carried out was very much focused on whether the product is likely to become more popular in the future."

Simon Little, chairman of the mortgage prudcut board for Safe Home Income Plans, said "We would welcome them entering the market."

Sixty Plus comment: A major new entrant such as Nationwide would give a great boost to the equity release market. The resulting publicity which would create greater awareness and confidence in equity release.

Report calls for local authorities to provide equity release

Local authorities should provide equity release mortgages to give the market much needed impetus, say the Joseph Rowntree Foundation as reported by Money Marketing (19/10/06).

A study by the foundation says a drastic solution is required to resolve the problem of consumers having little faith in the market without more high street brands being involved, while many brands will not enter the market until it is bigger.

It also calls for restrictions on means tested benefits to be relaxed so potential borrowers are not put off.

This follows consumer lobbyist Which? Saying in January it wants the government to lead the equity release market into the mainstream.

Prudential predict equity release market will double in two years

Prudential believes the equity release sector is liley to doublt to well over £2bn in the next two years reports Money Marketing (19/10/06).

Lifetime mortgage director Ali Crossley says such a rise is well below what many would hope for but is realistic.

Prudential has launched a team of 20 advisers because of the lack of Independent Financial Advisers in the sector.

Sixty Plus comment: It is entirely realistic that the market may double as there is certainly increasing demand for equity release.

It is of some concern that providers are launching their own sales force as clients should always seek independent advice.