Key comments on Equity Release Council Spring Report
25 April 2023
Key comments on Equity Release Council Spring Report
Following the release of the Equity Release Council’s spring report (click here) which reveals that customers made over £109 million worth of repayments in 2022, Will Hale, CEO of Key, the UK’s largest later life lending adviser, said:
“Today’s Spring Report from the Equity Release Council paints a picture of a sector coming of age during unprecedented economic challenges. While the number of products on offer has fallen since the fateful mini-Budget, interest rates have risen and maximum LTVs have reduced, the sector is still managing to step-up to support customers achieve their wants and needs in later life.
“Historically, equity release has been seen by some as a product of last resort and one lacking in flexibility. However, the figures released today highlight that lifetime mortgage customers made £102 million of repayments last year and this serves as evidence that these outdated views are no longer credible.
“Many customers, whilst unable to pass the affordability criteria of mainstream lenders or wanting to reduce their monthly outgoings as the cost of living crisis bites, recognise the benefits of serving some or all of the interest on their equity release mortgage and/or making ad hoc capital repayments as and when finances allow.
“Good specialist advisers ensure that the benefits of mitigating the impact of compound interest through making repayments are clearly explained as part of the advice process. This message is clearly landing as almost half (46%) of the customers we speak to say they are going to make repayments at some point during the time they hold the product.
“As the modern later life lending market continues to evolve and more product innovation emerges, we need to consider how we as an industry better support people so these flexible features are used appropriately through the product lifecycle and repayment strategies align with changing personal circumstances.”