Equity release is becoming an ever more mainstream part of the property market in the UK. The latest figures from the Equity Release Council, the industry’s trade body, show that the number of new and returning equity release customers between January and March hit a new quarterly high, while there has been a jump of 21% in the number of new plans agreed year-on-year.
Given the incredible rise in the value of our homes, unlocking some of that value whether to supplement pension saving, to carry out home improvements or to provide financial support to loved ones is only going to become more attractive to older homeowners in the months and years ahead.
The role of face-to-face advice
An important change has taken place within the equity release market lately. Potential borrowers are once again required to attend at least one face-to-face meeting with a solicitor before they are allowed to go ahead with an equity release plan.
This requirement was understandably changed during the pandemic when such sessions simply were not possible. Instead a temporary amendment to the Equity Release Council’s rules meant that a combination of written advice and documented video or telephone calls were acceptable.
Thankfully this measure actually brought in additional checks to ensure that everything was above board, allowing thousands of older people to tap into the money held within their property at a challenging time.
It’s encouraging that while face-to-face sessions are resuming, the industry is talking openly of making the most of the lessons around how technology can help keep the process as efficient as possible. The sensible incorporation of technology in order to smooth out the property financing journey is something that we are very passionate about at eConveyancer.
The change is also a reminder of the importance of legal teams in the equity release journey generally, including on the conveyancing side.
Expertise makes a difference
The legal side of borrowing against a property can vary significantly between cases, based on the parties involved and the type of loan being undertaken. Obviously there is a big difference between a remortgage and a full property sale, but equally there are important distinctions between a remortgage and an equity release loan.
Yes, both cases involve financing being raised against a property by the existing homeowner, but the implications can be altogether different.
This can be problematic if the conveyancer tasked with handling the case is inexperienced in the equity release field. Just as it is a specialist area of the advice sector, so too is it a specialist and unique sector within conveyancing. Employing a conveyancer to handle an equity release case if they don’t have the necessary expertise and experience risks serious mistakes being made, exposing the client to issues down the line.
All the bases covered
While it can be tempting for intermediaries to stick to using just a couple of regular conveyancers for all of their clients, the reality is that this jack-of-all-trades approach is far from ideal.
It’s not just equity release; if the conveyancer doesn’t specialise in a particular niche of the property market, then it’s all too easy for the case to be delayed to the point of collapse, or for issues to crop up with the legal work down the line.
The end result is an unsatisfied client and a potential loss of income for the intermediary.
By contrast, working with a panel manager with an extensive line-up of conveyancing firms from which to choose eliminates those risks. At eConveyancer for example we have built a formidable panel of legal firms, ensuring that intermediaries and their clients always have an expert they can call on, no matter how complex or unique their case may be.
The legal side of a property deal – whether it’s a full transaction or a form of refinancing like equity release – is crucial, yet it’s the intermediary who gets the credit when things go well. Thinking carefully about the partnerships you form can deliver a better experience to your clients, and secure their business for years to come.
Karen Rodrigues is director of sales at eConveyancer