Neville James breaks new ground for 'non-standard' home reversions

Chichester-based firm Neville James has launched a white-labelled home reversion product, specialising in non-standard constructions and unusual properties, reports Mortgage Solutions (18/12/06).

Better known for its work in the traded endowment policy (TEP) market, Neville James has teamed up with Crown Equity Release to offer the product.

Karen Gill, managing director of Neville James, said the decision to enter the market was an easy one, adding: "There are a lot of synergies between the TEP and equity release markets, as they are both specialisms, dealing with clients who need to access money. There are also similarities with TEPs where you need to transfer legal title clearly, which is similar to conveyancing a house."

Neville James is targeting clients with flying leasehold properties, short-term leases, agricultural properties and properties in Scotland. But Gill said: "We are not bound by immovable barriers." Operating as a regulated firm, it has decided not to become a member of Safe Home Income Plans (SHIP) at this stage.

SHIP challenges Which? To debate equity release concerns

Safe Home Income Plans (SHIP) has called on Which? To contribute to a sensible dialogue on equity release that will benefit consumers, reports Mortgage Solutions (11/12/06).

SHIP chief executive Jon King said Which? seemed unwilling to accept market forces meant equity release was increasingly becoming part of retirement planning. He said SHIP wanted to publicly repeat its invitation to Which? To work with SHIP, to improve the equity release sector, making it cheaper and more accessible to consumers.

King said “We invite Which? To submit any sensible recommendations for a next step, to sit on our independent complaints board or otherwise contribute to a sensible dialogue that will benefit consumers.”

Need for equity release 'remains strong'

There is a social need for equity release according to Marion Hatfield, a consultant for the government on pension provision, reports Mortgage Introducer (2/12/06).

Speaking at the Retirement Plus roundtable event on the future of equity release, Marion Hatfield said "I see equity release as another income stream for people who have inadequate pension provisions and are becoming more reliant on their own self-provision. I believe equity release will become a mainstream product that will help to fund many people's retirement."

Sixty Plus comment: We agree that there is a social need for equity release. However retired homeowners are using equity release for lifestyle choices as well. This may be improving quality of life, home improvements or helping children or grandchildren onto the property ladder.

Equity Release intermediaries call for qualified adviser list

Equity release intermediaries have called for a list of qualified advisers to be provided to inform consumers about access to independent advice, reports Mortgage Solutions (4/12/06).

The call for a list came as the Financial Services Skills Council (FSSC) said it prepared to publish its examination standards for home reversion plans.

Sixty Plus comment: This could only be a positive move.

We have seen several reports this year that there is a lack of qualified equity release advisers so the more that is done to help people find advice, the better for all concerned.

Life expectancy disparity leads to debate on postcode-based products

Figures from the Office for National Statistics show wide disparity in life expectancy for 65 year olds across the country, which will have implications for the quity release market, reports Mortgage Solutions (27/11/06).

Men aged 65 can expect to live 16.6 years and women 19.4, however, regional variations show that in Kensington and Chelsea men expect to live to 82.2 while in Glasgow it is 69.9.

Some providers already offer deals on impaired lives.

Jon King, chief executive of Safe Home Income Plans, said “I am not aware of an annuity that pays more on postcode. You need an impairment to have an impact on loan-to-value rates. The same surely should apply for equity release products. It is not possible to devise products on a postcode basis.”

Stonehaven move into equity release

A new equity release provider has rolled out its range, reports Financial Adviser (23/11/06).

Stonehaven caught attention in August when it piloted new products such as build-your-own and flexible cash release.

Following a successful pilot, Stonehaven was approved by Safe Home Income Plans in November.

The equity release market is thought to be worth £1.4bn a year, of which £800m comes through intermediaries.

Jayne Almond, Stonehaven’s chief executive officer, said “It is an exciting time for the market. Attitudes towards inheritance are quickly changing. We want to grow consumer confidence in equity release products and ensure advisers are well placed to confidently advise products.

The flexible cash release product provides a drawdown facility. It can be taken either in a lump sum or as regular payments. The build-your-own product enables the adviser to develop a bespoke product.

Equity release from high value property is a ‘lifestyle’ choice

Industry figures have reported an increasing number of equity release transactions taking place on higher value properties, reports Mortgage Solutions (20/11/06).

Michael Philps of Hinton & Wild said it had seen a definite increase in higher value properties being used for equity release. “It is not £200,000 or £250,000 anymore. It is real lifestyle type customers rather than desperation sales these days. They do not have to take out equity release but, for whatever reason, they choose to.”

Customers are becoming more aware of the inheritance tax burden while others simply wanted to provide their beneficiaries with money while they were still alive.

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.