As the festive period gets underway, it gives me enormous pleasure to see the Equity Release industry ending the year on such a high. It’s already clear that 2016 will see increased competition between lenders, and greater product innovation coupled with lower interest rates can only be a good thing for borrowers.
Of course, the huge increase in Equity Release lending during the third quarter was a massive boost for the whole sector. Just to recap, total lending for Q3 was £452.6 million, this was £68.3 million higher than Q2 and established a lending record for the second successive quarter. To put it another way, this means that people were accessing a record £5 million of housing wealth every day. Total Equity Release lending for the first nine months of 2015 was £1.16bn, which is just £220 million shy of 2014’s annual amount of £1.38 billion, indicating that another record year is a formality.
Recent months have also seen some very positive press coverage, both in regional and national publications. I have been particularly heartened to see supportive articles from columnists with a track record of making negative remarks about equity release. The penny finally seems to be dropping that blinkered criticism of the industry using outdated arguments is not compatible with recent upbeat developments. It is only sensible for those with sufficient equity to at least consider Equity Release as a means of facilitating a more comfortable retirement, not to mention the possibility of helping loved ones move onto or higher up the property ladder.
However, increased product innovation and flexibility means that expert advice has never been more important. Equity Release is a specialist area and advisers who dabble face the real risk of making inappropriate recommendations. Thankfully, introducer commission levels are extremely generous and increasing numbers of non-specialist advisers are finding that it pays to refer clients to a specialist firm.
I’m always struck at this time of year how many older people struggle with heating bills, let alone the number who live in properties that with a few basic improvements could make the winter months much more enjoyable. I sincerely hope that the increasingly positive developments within the industry will encourage more and more in this type of situation to consider equity release as an option in 2016.
May I take this opportunity to wish all readers a very Merry Christmas and a prosperous New Year.