The equity release market has seen a new product launched every 28 hours this year, according to Key Partnerships.
Analysis by the equity release referral service found 525 equity release plans were on the market between January and August 2020, an increase of 510 per cent from the full year of 2017, when there were 86 plans.
Products allowing interest payments, drawdown and those that offer fixed early repayment charges also increased since October 2019, Key Partnerships found.
The number of plans allowing interest payments more than doubled, from 81 at the end of October 2019 to 186 in August 2020. Drawdown products also rose in the same period, from 90 to 294.
Additionally, the number of plans offering fixed early repayment charges increased by almost half since October 2019, from 140 to 207 in August 2020.
Jason Ruse, business development director at Key Group said: “While the equity release market – as with other sectors – has had to work hard to weather the current pandemic, we have still seen significant product innovation and development.
“Indeed, with more funders than ever active in the market, there is more choice and more competitive interest rates than ever which is great news for customers. That said, it is important to ensure that when customers do look for support around how to access their housing equity, they consider all their options and pick the right product for them.”
Martin Wade, director at Access Equity Release said this was a continuation of a very long trend in the improvement of both flexibility and affordability.
He said: "Undoubtedly product awareness amongst consumers is still nowhere near where it needs to be but with the incredibly competitive market between product providers, the consumer is the outright winner. With this trend to launch even more flexible products it gives advisers more tools in their box to tailor solutions to each individual they meet.
“Every new innovation makes it easier to dispel the misconceptions that remain about equity release in some quarters and allows us to be more confident in positioning the product to a much wider audience thus helping equity release become the mainstream product that it surely should be when looking at financial planning for later life.”
|Fixed early repayment charges||207||140|
|Lend on sheltered or age-restricted properties||315||164|
Jan Johnson, director at 55Plus Equity Release, added: “The continued growth in the number of equity release products this year doesn’t surprise us. In part it’s a reflection of equity release becoming more mainstream; both wealth managers and homeowners are becoming more familiar with it as a tool within retirement financial management, and lenders are responding to the growing demand with increasingly innovative features”.
Anticipating continued growth in demand and while the financial climate remains uncertain, Ms Johnson said she expected lenders would “continue to innovate to offer products with the features homeowners need in the current situation”.
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