Equity release products treble in two years

Equity release products treble in two years

The number of equity release products in the market has trebled in the past two years from 47 to 144, according research by Key Partnerships.

The referral service warned this growing product choice underlined the need for customers to receive advice when choosing an equity release plan.

Product features have also become more varied, with 117 products allowing ad hoc penalty free repayments compared with 27 in October 2016 while the number of products allowing interest payments grew from three to 22 in the same period.

The number of products with fixed early repayment charges increased from nine in October 2016 to 80.

In September the Equity Release Council reported product innovation had driven growth in the equity release market.

The council attributed increased choice to falling prices in the sector, reporting the average interest rate sat at 5.22 per cent in July 2018 compared with 5.96 per cent the previous year.

Jason Ruse, head of Key Partnerships, said equity release lenders had embraced innovation and expanded the options available to customers in response to growing demand.  

He said: "Unlike some other markets, the growth in product options has been driven by existing lenders looking to meet evolving customer needs rather than new providers entering the market."

Mr Ruse said while the transformation in choices available was welcome, it highlighted the need for independent experts able to advise on the whole market to find solutions suited to clients' particular needs.  

He said: "Advisers who do not regularly provide support for clients looking to make the most of their property wealth could through no fault of their own find their advice is not up to date as innovation is constantly increasing and expanding the options available."

Key Partnership was the equity release referral service for specialist adviser firm Key, which rebranded from Key Retirement earlier this year.