Following the Equity Release Council’s latest figures this morning, Will Hale, CEO at Key Later Life Finance has shared his thoughts.
Will Hale said: “Today’s figures from the Equity Release Council highlight a healthy later life lending market but one not immune from the impact of the mini-Budget. Their figures suggest that while total lending hitting a new high of £6.2 billion, December was the quietest month since before the COVID-19 pandemic.
“Increased product flexibility and choice has seen the market double in size since 2017 as more people look to improve their retirement finances with the support of housing equity. While rates have increased post the mini-Budget, customers are able to take a more active approach to managing their borrowing using the ability to service interest and/or make ad hoc capital repayments which are common features now across modern lifetime mortgages. Important customer protections such as the no-negative equity guarantee and guarantee of tenure continue to be embedded in all products with features such as inheritance protection offering further flexibility. Also, lifetime mortgages no longer have to be a product for life with fixed early repayment charges creating opportunities for customers to re-mortgage down the line.
“There is no doubt that borrowers and their advisers have become more cautious – and rightly so in this higher interest rate environment. However, whether the answer is downsizing, a retirement interest-only product, equity release or delaying a decision altogether, specialist advice remains vital in helping customers make the best choice for their individual circumstances.
“Equity release is not suitable in all situations but with many people struggling with increasing mortgage payments and rising household bills the sector has an important role to play in helping customers navigate their way through the cost of living crisis and to continue to live a secure and fulfilling later life.”