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Equity release news Equity release news
Advice
A new IERAA for equity release
is key
The Summer saw the official general public and access for our providers attended the official
launch of the Independent Equity fellow professionals. Together we launch, along with ERSA and
Release Adviser Alliance (IERAA), will be stronger and can maintain Assureweb. In addition there were
which aims to promote the use of the highest of standards through over 50 advisers, all keen to find
highly qualified and experienced the common aim of offering out more about the Alliance. Initial
Jon King, managing
advisers in the equity release sector. independent specialist advice." feedback was excellent and the
director at Hodge
The focus for the Alliance over Dermot Brannigan, press officer signs are that many of the advisers
the next few months is to arrange a for IERAA said: "The fact that who attended the launch will now
Lifetime, looks at
number of meetings to be held more advisers turned up [to the apply to join. The overwhelming
why equity release
around the country to promote the launch] than we were expecting is a feeling was that the launch of an
Alliance to other advisers. great indication of the desire to alliance such as this was long
advice is crucial Anthony Harris, chairman of make this happen. The key is what overdue. In fact it was Robert
IERAA said: "The Alliance is all we do from here, though and the Sinclair who succinctly said that
Market conditions continue to
about providing access to the best success of the Alliance will be down launching this Alliance was ‘a sign
shape events within the world
individual advisers that the to the members within it." of an industry growing up’.
of financial services, as in so
industry can offer – access for the Nine of the top Equity Release
many other areas. The number
of mortgage products available
to consumers has reportedly
Many over 65s still working
fallen to its lowest level on
Following the Department of Work Already, our research highlights that retirement reflects a range of
record and trade press letter
and Pensions' announcement of an more than 900,000 over-65s are still economic pressures which are only
pages are hot with early review into the default working, with a third of these amplified by the effects of this
intermediaries berating lenders
retirement age, fresh analysis from working full time. Nearly half of recession, as well as broader health
for dual pricing and favouring
LV= highlights how those already people in this position (43 per cent) and lifestyle factors which see many
direct distribution.
reaching pension age are say they have no idea when they older workers keen and able to
Brokers understandably feel
responding to mounting financial will be able to retire. maintain an active role in the
that parts of the industry could
pressures and the impact of "In addition, more than one in workplace beyond the traditional
recession. five of those within five years of age 65. Financial services providers
be accused of biting the hand
Mike Rogers, LV= Group chief retirement (22 per cent) say they must respond to this trend by
that fed it for so long.
executive said: "The decision to will retire later than they had creating and explaining a more
In equity release, the value
bring forward the review of the planned before this recession hit flexible range of products to
of advice has always been seen
default retirement age by a year is a them. support people entering and
as paramount. From the positive move by the Government. "This trend towards later moving through retirement."
earliest days of the trade body
Safe Home Income Plans
(SHIP) when the rules New equity release customers up
entrenched the requirement
that a sale would only be made
The number of new equity release increase in customers but fall in still suffering along with the
customers rose by 5 per cent from value is unsurprising. mainstream mortgage market, it is
‘after an advised and personal
5074 (Q1 2009) to 5328 (Q2 2009) In line with the popularity of encouraging to see that the equity
recommendation’. These rules
as more consumers turned to drawdown mortgages, the average release market is starting to see
on compulsory advice were
equity release to boost their pre amount released fell from a high evidence of some positive
later reinforced by an insistence and post retirement finances, of £48,287 (Q1 2009) to £43,712 movement. The quarter on
of all advisers passing the according to the latest SHIP (Q2 2009). quarter increase in the number of
necessary exams. All long
figures for Quarter 2 of this year. While quarter on quarter plans shows that consumers are
before the RDR.
The figures show that the number customer figures show some signs once more starting to believe in
After all, not every client will
of drawdown mortgages sales also of renewed optimism, the market the UK housing market.
need an equity release plan and
increased by 14 per cent over this volume was down by 22 per cent "There remains a clear need for
trading down will always be an
period from 2376 (Q1 2009) to from the same time last year - equity release products - especially
2699 (Q2 2009). 5328 (Q2 2009) vs. 6864 (Q2 in the current economic
option for people to consider.
However, while the number of 2008). environment - a fact that many
Advice is always going to be
sales increased, the value of Intermediaries sold 64 per cent of stakeholders including the
central to the sale of equity
products sold over this period fell all new equity release plans - Government are starting to
release because at its heart is an to £232.9 million (Q2 2009) from slightly down from 65 per cent in acknowledge. We remain realistic
advice process not a product £245.01 million (Q1 2009). With 2009 but in line with the yet positive about the next
sale. And who better to give
drawdown mortgages - which are distribution trend (63 per cent) quarter's results, and expect to see
that advice – independent
structured to allow more regular established in 2007 and 2008. exciting market and product
advisers, suitably qualified and
withdrawals of housing equity - Commenting, Andrea Rozario, innovations as companies adapt to
accessible to clients.
now accounting for 51 per cent director general of SHIP, said: meet the changing needs of their
(Q2 2009) of the market, the "While the equity release market is clients."
September 2009 Mortgage Introducer www.mortgageintroducer.com
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