IFAs call for innovation in home reversion sector

Independent financial advisers are calling for providers to show more innovation in home reversion schemes, says Bridgewater Equity Release.

Peter Couch, managing director of Bridgewater, says advisers must be able to give clients what they need, whether it be as much cash as required, a specific release amount, regular payments over time or the ability to release further equity in the future.

Couch says: “If we meet the demands of IFAs and customers I would not be surprised to see home reversions representing 20% of the equity release market by the end of next year.”

Norwich Union agrees and says unless changes are made, business levels will not increase.

Brandon Cearns, marketing manager for equity release at NU, says: “The home reversion market has been on a downward trend for the past few years. To ensure growth, providers must address some key concerns.”

NU says it has identified three areas causing concern; transparency of products, risk of debt if the occupier dies early, and house price inflation. It says it has addressed these issues and urges other providers to do the same.

Dean Mirfin, business director at Key Retirement Solutions, also says home reversions need major development to ensure their place alongside lifetime mortgages in the equity release industry.

He says: “Innovation among reversion providers tends to be more slow than in the lifetime sector. But it is refreshing to see Bridgewater has strengthened its proposition in this market with a flexible reversion plan. This product offers a real alternative to drawdown lifetime mortgages.”