Three quarters of brokers recommend later life lending

Three quarters of brokers recommend later life lending

Research by Legal & General has shown 74 per cent of brokers either currently recommend or would recommend later life lending or equity release products in the coming year.

More than 200 attendees were polled at the firm’s April events in Scotland, London, Nottingham and Manchester, finding support for the burgeoning market.

The latest Equity Release Council figures suggested about £1.61bn was released from homes last year, an increase from £29m in 1992.

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Meanwhile, L&G this week revealed its lifetime mortgage sales during the first half of 2016 exceeded £200m, meaning they surpassed the full year comparator for 2015, as well as being greater than the firm’s individual annuity sales during the last six months.

Support varied across the country however, with just 35 per cent of brokers in Manchester and 29 per cent London do not plan to advise or refer customers for these products.

The research follows calls from the Council of Mortgage Lenders for increased later life regulatory reform, arguing it is becoming increasingly important to provide products that cater to the older generation, whilst also offering financial advice.

The CML stated these two areas have been separated for too long, which makes it much harder for customers and brokers to purchase and sell later life lending or equity release products.

Legal & General has advocated for later life lending by launching its own Hub earlier this year, helping its mortgage club members offer a holistic service to customers who are progressing through the later life mortgage journey, whether direct to lender or via a master broker.

Jeremy Duncombe, director of the L&G Mortgage Club, added: “With the rise in popularity of lifetime mortgages and other retirement lending products, it is really encouraging to see that a growing number of brokers are recommending these products as a means of funding retirement.

“The task now is to ensure that more advisers are playing their part in offering holistic retirement advice for our ageing population.”

In May, a Financial Conduct Authority paper suggested consumers looking to take out a mortgage should have access to “holistic advice and guidance” to help them consider borrowing in the context of other circumstances and goals such as pensions, possible future care needs and inheritance.

Mortgage advisers and networks reacted by pointing out how unrealistic this would be in practice, arguing it could lead to intermediaries becoming a ‘jack of all trades and master of none’.