View more on these topics

Equity release needs to be more flexible to meet demand

Equity release lenders need to provide more flexible options to release consumer demand, according to IFA HFM Columbus.

Mortgage director Gary Festa says there is plenty of pent up demand for equity release amongst mortgage clients, particularly as income from other sources, such as pensions, annuities or savings is coming under pressure but traditional rigid, fixed rate products are stifling demand.

Festa says: “Equity release has been proven time and again to be the solution of choice for retired or near retired, property rich, cash poor homeowners.

“The problem is that lenders are not offering the kind of equity release product that potential borrowers want. Lenders are currently only offering fixed term rates, and while these can give a degree of long term security, they do not reflect today’s far lower base rate. Typical rates are now well over 6 per cent and this is poor value.”

Festa says clients are saying they would like to see the option of a tracker deal, particularly if combined with an cap.

“This would be a very attractive option for the buying public.

“In a climate where barely any new mortgage business is being written, lenders have a golden opportunity to do well in one of the few potential growth areas of the economy. But they need to deliver the kind of products people actually want.”



News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm