Equity release at a crossroad this year

CLARE BARKER, CHAIRMAN, EQUITY RELEASE SOLICITORS ALLIANCE
CLARE BARKER, CHAIRMAN, EQUITY RELEASE SOLICITORS ALLIANCE

Appetite for equity release seems to be as strong as ever from home owners. But we have seen many indications of how difficult it is for lifetime mortgage providers to obtain enough funding to satisfy demand.

This year could be something of a crossroads for the industry. A parliamentary election is looming and cries for funding for long-term care are increasing.

The future of the industry could depend largely on which political party takes office and on its approach to dealing with the issues retired people face – low interest on savings, a pension deficit, long-term care funding and high pensioner inflation.

Is equity release the panacea for these issues? No, but it is an important tool for retired home owners to have at their disposal. It seems ironic that, at the point the reputation of the industry improves, funding becomes a major problem. Yet again, we see barriers to equity release entering the mainstream mortgage arena.

Industry stakeholders must work together to create a cohesive and knowledgeable marketplace and to keep awareness of equity release at the forefront of people’s minds as a possible solution to the rising cost of living in retirement.

To achieve this we need to ensure that only suitably qualified financial advisers and specialist solicitors give advice.

By doing this, the reputation of equity release will continue to grow and remain untarnished.

Only time will tell if we will see the expansion that has been predicted for several years.