Equity release boom predicted for next two years

Equity release boom predicted for next two years

Advisers are anticipating a boom in equity release over the next two years, according to research by Key Partnerships.

Independent research conducted on the firm’s behalf in November with 106 advisers specialising in retirement planning, found 65 per cent anticipate an increase in client enquiries relating to equity release to fund at least part of their retirement.

A further 44 per cent said that the pension freedoms will provide opportunities for clients looking to access equity in their home as part of their retirement planning.

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Will Hale, director at Key Partnerships, said all advisers should be discussing ways to release property wealth with clients, as it plays an increasingly important role in long-term planning.

However, he noted that advisers need to plan ahead on how they expand into equity release and it is important that they seek specialist support.

“Not all advisers want to specialise in equity release, but are aware that they should be offering access to advice for their clients.”

Mr Hale added that one major growth area will be the tax advantages from using property wealth ahead of pension savings, with more than half of advisers pointing to this.

Equity release lending increased by £68.3m in the third quarter of last year, in the biggest quarterly rise since 2004, according to the latest Equity Release Council figures.

One in three equity release plans sold to the end of Q3 were arranged by Key Retirement, which announced lending growth of 20 per cent last month.

Key Partnerships is a referral service providing a whole of market solution for advisers and their clients, through Key Retirement. In return for the referral, advisers earn on average £1,300 on completion of the loan

Adviser view

Jason Witcombe, director of London-based Evolve Financial Planning, said: “It is pretty obvious that there is growing demand for equity release, but the perception is that the market is not as competitive as it needs to be.

“We don’t have the permissions to do equity release, so we outsource it, but if we saw more demand we would get the appropriate permissions.”