Equity release referral service Key Partnerships, has said that with the number of equity release products growing by 206% in the last two years, it is “vital” that customers receive specialist advice.
Its market analysis shows that the number of products available has trebled in the past two years to 144 from just 47 in October 2016 with more product features than ever before.
| October 2016 | October 2018 | |
| Number of products | 47 | 144 |
| Able to repay interest on an ongoing basis | 3 | 22 |
| Ad hoc penalty free repayments | 27 | 117 |
| Drawdown | 48 | 62 |
| Inheritance Protection | 27 | 103 |
| Downsizing Protection | 7 | 73 |
| Fixed Early Repayment Charge | 9 | 80 |
Currently, 81% of all plans (117 products) allow ad hoc penalty free repayments and 15% explicitly allow interest to be paid. This is a significant increase in the last two years – in 2016, just 7% (three products) allowed people to make interest repayments.
Other major product innovations include the increasing inclusion of downsizing protection with 73 plans – more than half the market – offering the feature. 55% of products have fixed early repayment charges compared with 19% in 2016.
Jason Ruse, head of Key Partnerships said: “Equity release lenders have embraced innovation and have expanded the options available to customers in response to growing demand. Unlike some other markets, the growth in product options has been driven by existing lenders looking to meet evolving customer needs rather than new providers entering the market.
“While the transformation in choices available is very welcome, it highlights the need for independent experts able to advise on the whole market and to find the solutions that suit clients’ particular needs.
“Advisers who do not regularly provide support for clients looking to make the most of their property wealth could through no fault of their own find their advice is not up to date as innovation is constantly increasing and expanding the options available.”
