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Comment: Released into the mainstream

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As equity release gains increasing acceptance by lenders and borrowers, the number of intermediaries selling it will grow

It is predicted the equity release market could reach £2.3bn by 2019. Indeed, given the UK’s significant pension deficit issues, it is clear the need for the sector will rise and it will become a viable solution as part of overall retirement planning.

With house values increasing and product rates being driven down by fierce competition not seen before, equity release is fast becoming a far more acceptable option for an ageing population.

The number of brokers selling equity release will grow as the product is regarded as more mainstream. Investment by lenders in intermediary point-of-sale technologies means sale processes are far more efficient, allowing ease of access for documentation, KFIs and online applications. This (sometimes significant) investment is testimony to where lenders think the equity release market is going in terms of volume.

Looking ahead, further investment in technology should also cater for more direct interaction with the borrowers themselves. Applicants will be able to source product information and make online enquiries more easily, as well as self-service their mortgage post completion. All of this will drive efficiencies in lender operations, creating a return on investment by keeping staff numbers to a minimum.

As more funding comes to market, there will continue to be new entrants and expansion of existing players. Whether a broker or an institution thinking of dealing in equity release, there is still an opportunity to work in an expanding market that can provide legitimate value to borrowers.

Richard Pike is sales and marketing director at Phoebus Software

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