Independent advisers accounts for 74% of all equity release plans sold between July and September, according to figures from SHIP, reports Mortgage Strategy.
The adviser share of the equity release market has climbed 10% since the three months to June, continuing the recent trend for brokers to account for the majority of equity release business.
The equity release market is down 22% against the same time last year when total lending was £303.3m.
The number of new equity release customers dropped by 2.5% quarter-on quarter from 5333 to 5198, and has dropped 35% on an annual basis.
Average amounts lent through equity release increased by 3.9% in Q3 to £45,434, compared with £43,746 for the previous three months.
Andrea Rozario, director-general of SHIP, says:“The drop in the number of plans sold can be partly attributed to the funding issues that the industry is currently facing.
"While equity release providers are experiencing high levels of customer demand, a significant impact on the quarter’s business figures has been the lack of liquidity in the overall market which has restricted the lending activity of some providers and resulted in the withdrawal from the market of some others."
Sixty Plus Comment: It is pleasing that customers are becoming more aware of the importance of independent advice.
Thursday, October 15
Wednesday, September 30
Research key to good equity release advice, says ERSA
The key to good equity release advice is thorough research of the products on offer, according to the Equity Release Solicitors’ Alliance, reports Mortgage Strategy.
Members of the equity release legal trade body have ranked the aspects of advice equity release advisers need to focus on in order to ensure a high standard of advice.
Comprehensive research of all the providers, plans and products available was ranked as one of the most important features of good advice, after the legal requirement of specialist equity release qualifications.
Clarity of advice and the need to discuss alternative options to equity release from the start were also earmarked by ERSA members as essential factors in good advice.
Claire Barker, chairman of ERSA, says: “After the mystery shopping report from Which?, IFA advice has been placed under the spotlight. While many IFAs offer exceptional advice to clients, some are clearly not so thorough."
“Alongside financial and medical considerations for each client, no categories could be deemed ‘unimportant’, and we feel that some aspects simply cannot afford to be overlooked if clients are to feel informed about their decision before seeking specialist legal advice.”
Members of the equity release legal trade body have ranked the aspects of advice equity release advisers need to focus on in order to ensure a high standard of advice.
Comprehensive research of all the providers, plans and products available was ranked as one of the most important features of good advice, after the legal requirement of specialist equity release qualifications.
Clarity of advice and the need to discuss alternative options to equity release from the start were also earmarked by ERSA members as essential factors in good advice.
Claire Barker, chairman of ERSA, says: “After the mystery shopping report from Which?, IFA advice has been placed under the spotlight. While many IFAs offer exceptional advice to clients, some are clearly not so thorough."
“Alongside financial and medical considerations for each client, no categories could be deemed ‘unimportant’, and we feel that some aspects simply cannot afford to be overlooked if clients are to feel informed about their decision before seeking specialist legal advice.”
Friday, September 25
Equity release shifting to independent advisers
The withdrawal of Newcastle Building Society from equity release illustrates a move towards independent advices, says Dean Mirfin of Key.
"In this climate, there has been a shift away from direct salesforces. Consumers prefer to get independent advice" he said.
Newcastle is closing its Equity Release Service by the end of the year. In Retirement Solutions shut its doors in August.
David Wright of Sixty Plus said "In my view independent advice is by far the best way to obtain equity release advice. Going to a tied or multi-tied adviser means getting the best plan for you is down to luck rather than judgement."
"In this climate, there has been a shift away from direct salesforces. Consumers prefer to get independent advice" he said.
Newcastle is closing its Equity Release Service by the end of the year. In Retirement Solutions shut its doors in August.
David Wright of Sixty Plus said "In my view independent advice is by far the best way to obtain equity release advice. Going to a tied or multi-tied adviser means getting the best plan for you is down to luck rather than judgement."
Friday, August 28
Godiva Mortgages to pull out of Lifetime Mortgages
More unfortunate news, Godiva Mortgages are withdrawing their Lifetime Mortgage from next week.
Interestingly this is not because of a lack of funds but "it is now difficult to offer a long-term rate which we believe is fair to customers". In other words, they have a choice to increase rates or pull out.
They've chosen to pull out because they can make more profit on mainstream lending - my interpretation of course.
This challenges the perception of Equity Release being too expensive. Although the bank base rate is only 0.5%, the cost of funding Lifetime Mortgages - which are fixed for life unlike mainstream mortgages - is no cheaper than it was a year or two ago; indeed some rates have crept up over recent weeks.
By the way, existing customers with a Godiva Lifetime Mortgage are not affected and Godiva hope to return to the market in the future.
Interestingly this is not because of a lack of funds but "it is now difficult to offer a long-term rate which we believe is fair to customers". In other words, they have a choice to increase rates or pull out.
They've chosen to pull out because they can make more profit on mainstream lending - my interpretation of course.
This challenges the perception of Equity Release being too expensive. Although the bank base rate is only 0.5%, the cost of funding Lifetime Mortgages - which are fixed for life unlike mainstream mortgages - is no cheaper than it was a year or two ago; indeed some rates have crept up over recent weeks.
By the way, existing customers with a Godiva Lifetime Mortgage are not affected and Godiva hope to return to the market in the future.
Thursday, August 6
In Retirement Services enters administration
Following the closure of In Retirement Services, their Equity Release advisers will be seeking new opportunities.
We at Sixty Plus are building a growing team of advisers and we welcome enquiries from any specialist adviser looking to continue their Equity Release career.
Please contact David Wright on 020 8393 5566 for a discussion in confidence.
We at Sixty Plus are building a growing team of advisers and we welcome enquiries from any specialist adviser looking to continue their Equity Release career.
Please contact David Wright on 020 8393 5566 for a discussion in confidence.
Friday, May 8
Parental equity could help first time buyers
The mortgage industry should look into developing products that allow first time buyers to tap into the equity locked in their parents' homes.
This was the conclusion of research by Peter Williams, executive director of the Intermediary Mortgage Lenders Association, for the Building Societies Association.
This is an interesting point and, of course, the products for this already exist - equity release.
Indeed, with first time buyers typically being in their mid to late twenties, it may be that their parents are in their fifties and perhaps too young for equity release.
Grandparents may be the ones more likely to consider equity release to help their family onto the property ladder.
IFA, mortgage brokers or solicitors should contact me if they wish to discuss the possibilities.
This was the conclusion of research by Peter Williams, executive director of the Intermediary Mortgage Lenders Association, for the Building Societies Association.
This is an interesting point and, of course, the products for this already exist - equity release.
Indeed, with first time buyers typically being in their mid to late twenties, it may be that their parents are in their fifties and perhaps too young for equity release.
Grandparents may be the ones more likely to consider equity release to help their family onto the property ladder.
IFA, mortgage brokers or solicitors should contact me if they wish to discuss the possibilities.
Wednesday, April 29
Which? under fire for equity release comments
The Association of IFAs (AIFA) has criticised consumer watchdog Which? after it hinted its report into the quality of equity release advice given by intermediaries will be far from glowing, reports IFA online.
Chairman John Gummer MP says Which? "talks as though IFAs behave badly naturally", adding he disapproves of its suggestion equity release should be a last resort.
It follows comments made today at a debate hosted by solicitor Eversheds and trade body Safe Home Income Plans (SHIP).
Speaking at the event, Which? spokesperson Teresa Fritz said the consumer body was in the process of conducting a mystery shopper exercise on a number of equity release advisers.
Although Fritz pointed out the study is still at an early stage, she admitted early results suggest a poor level of advice, with conduct of business rules ignored.
But Gummer hit back: "Which? talks as if we in the industry are a group of people that behave badly naturally.
"I do not like its statement equity release should be a last resort. It is an option that should be considered carefully. We do not want to frighten off people for whom this is the best option."
Gummer adds while intermediaries provide a good standard of advice, they cannot force clients to follow it.
Chairman John Gummer MP says Which? "talks as though IFAs behave badly naturally", adding he disapproves of its suggestion equity release should be a last resort.
It follows comments made today at a debate hosted by solicitor Eversheds and trade body Safe Home Income Plans (SHIP).
Speaking at the event, Which? spokesperson Teresa Fritz said the consumer body was in the process of conducting a mystery shopper exercise on a number of equity release advisers.
Although Fritz pointed out the study is still at an early stage, she admitted early results suggest a poor level of advice, with conduct of business rules ignored.
But Gummer hit back: "Which? talks as if we in the industry are a group of people that behave badly naturally.
"I do not like its statement equity release should be a last resort. It is an option that should be considered carefully. We do not want to frighten off people for whom this is the best option."
Gummer adds while intermediaries provide a good standard of advice, they cannot force clients to follow it.
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