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.”