Equity Release  

How equity release has evolved

  • Explain how products and mortgage rates have changed
  • Explain what is driving the increase in funding
  • Identify ways in equity release could help fix the social care crisis
CPD
Approx.60min
How equity release has evolved

Introduction

The equity release market continues to grow and evolve; moving away from the days when interest on equity release plans would roll-up and be added to the balance to be repaid when the house was sold by the customer or their estate, or when the customer moved into long-term care to offering greater flexibility and variety on products.

As a result, consumer interest in the later life lending sector has been steadily increasing over the past 10 years, with more than 19,000 plans taken out in the first half of 2020 compared to just over 10,000 in the first half of 2010, according to data from Key.

The sector has also worked hard to shed its past reputation - heavily criticised in the past over how much value is left in the property for the children, by the time the loan needs to be paid back and inflexibility when it came to loan repayments.

As the market has grown, so have the customers' needs. Lenders have also responded to advisers in trying to deliver significant product innovations.

More lenders have also entered into the market for myriad reasons.

This guide will discuss the ways in which the equity release market has evolved; looking at the variety of products, competition, the increase in the number of lenders and also how the FCA views the sector.

This guide qualifies for an estimated 60 minutes' worth of CPD. 

Contributors to this guide: Paula Steele, director at John Lamb Hill Oldridge; Andrew Morris, senior equity release adviser at Age Partnership; Will Hale, chief executive of Key; Georgina Oxton, Strategic Sales Manager at LV; Mark Gregory, chief executive of Equity Release Market; Steve Wilkie, chairman at Responsible Life; Jim Boyd, chief executive of The Equity Release Council; Claire Singleton, chief executive of Legal and General Home Finance.

Ima Jackson-Obot is deputy feature editor at FTAdviser and Financial Adviser

In this guide

CPD
Approx.60min

Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

  1. According to Steve Wilkie, equity release customers have a variety of needs that can be placed into three categories. But which of the following is the odd one out?

  2. In the FCA review into equity release and advice which of these is not a significant concern raised by the regulator when it came to the suitability of advice provided?

  3. What should borrowers know about drawdown products when considering it as an option?

  4. What is driving the reduction in equity release mortgage rates?

  5. True or false, as a result of coronavirus, there has been an increase in the number of people who have said they would try to ensure their future care needs are met in their own home rather than a residential care setting.

  6. True or false, according to Jim Boyd, property wealth alone cannot solve the care crisis but it does provide a means for people to stay living comfortably as they age in the place they call home.

Nearly There…

You have successfully answered all the questions correctly, well done!

You should now know…

  • Explain how products and mortgage rates have changed
  • Explain what is driving the increase in funding
  • Identify ways in equity release could help fix the social care crisis

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