[su_dropcap style=”flat” size=”5″]L[/su_dropcap]ike every other industry, the later life lending sector has recently found itself having to rapidly take stock and adapt to wider events as the restrictions put in place by the government have necessitated the rapid development of new processes and technological solutions to continue best serving both advisers and ultimate end-point customers.
This was arguably best evidenced by the market’s swift move to desktop valuations in response to government restrictions, and the subsequent number of valuation options being offered to consumers once the property market began to open up again.
However, while a lot of the market’s focus has understandably been on changing and adapting processes to keep business flowing, it’s important that the later life lending sector doesn’t lose sight of the needs of the customer and continues to create and develop product solutions that meet them. The degree to which the market has remained changeable and fluid is perhaps best illustrated by recent Knowledge Bank data, with all of the top five broker searches for equity release criteria changing from April and May. Additionally, the three leading search terms for May (‘Married Couple Application in One/Single Name’, ‘Flat Roofs’ and ‘Lodger/Boarder/ Rent a Room’) had only featured in the top five once in the two years that data had been collated.
Newly-released data from HUB has also highlighted a correlation between amounts borrowed and fund uses, with those borrowing the minimum amount of £10,000 likely to use the released equity to finance holidays and leisure (33%) or home improvements (30%) and those borrowing £330,000 or more would be more likely to use the funds to pay off their mortgage (39%) or refinance current lifetime mortgages (25%). These latest statistics offer a window the versatility of later life lending and the variety of customers – and needs – the market needs to satisfy.
It’s inevitable that as equity release has grown in popularity among consumers there’s been a need for greater flexibility in the retirement solutions being made available to consumers, and the market has responded quickly and effectively to these considerations. The recently-released Equity Release Council Spring report showed large year-on-year increases in the number of products now containing certain features, including regular payments (which saw an 80% rise between January of 2019 and January of 2020), plans to accept age-restricted accommodation (a 126% increase), and ERC-free partial repayments (a 65% rise).
We’ve understood the need for continued product innovation, and in addition to carefully managing our processes in recent weeks to ensure customers have access to retirement solutions we’ve launched a new option in Heritage Freedom 40. Offering up to 40% ERC-free overpayments and 12 repayments per year our latest development is available from age 55 (with no maximum age cap) and offers loans amounts up to £600,000, underlining our commitment to continue innovating even during the most uncertain of times.
The recent launch of Freedom 40 came off the back of a prolonged period of developing our existing ranges, including the widened distribution of our Classic range and a raft of enhancements being made to our Heritage range, the latter of which (to name but one major change) reacted to the increasing interest in equity release from those in age-restricted properties by allowing for them in the acceptable property criteria. We’ve witnessed first-hand the ever-changing nature of customer profiles and increasingly varied spectrum of needs and priorities, and have striven to continue evolving our products to make sure they represent retirement solutions for our client base.
The equity release market has amply demonstrated its ability to react quickly and effectively to a set of changing parameters, and has also in recent years undoubtedly proved its long-term commitment to developing flexible products for those looking at releasing housing equity as a retirement solution.
Nonetheless, with the signs pointing at a potential influx of people exploring it as a way to either shore up their finances or help loved ones in these difficult times, it’s perhaps more important than ever that it continues producing innovative products that offer attractive and effective retirement planning avenues and options to consumers in these trying times.