The rapid adoption of technology by lenders and advisers has been the “biggest milestone” of the year within the equity release market, according to a lifetime mortgage lender.
Dave Harris, chief executive officer at More2Life, said the later life lending industry had historically been “hesitant to break away” from paper-based processes, due to a focus on face-to-face financial and legal advice, and the need for human input in property valuations.
But Mr Harris said the pandemic had resulted in a “much greater understanding” of the role technology can play in the industry.
He said: “Key players in the market are embracing the ‘push for digital’ by implementing new processes, such as remote valuations, to ensure they can continue to support older borrowers amid the ongoing uncertainty.”
Restrictions on physical property valuations during the first lockdown saw equity release lenders adapt to remote valuations.
Additionally, the Equity Release Council agreed to enable remote provision of legal advice shortly after the first lockdown began in March, subject to ongoing review.
Guidance from the Council on non face-to-face solicitor appointments reads: “Given that you will not be meeting the client in person, you must provide your legal advice in writing and then follow up with video/telephone calls (either recorded for playback or via detailed attendance note) with all parties to the equity release.”
Jim Boyd, chief executive officer of the Equity Release Council, said the market had proved to be “agile and adaptable” to weather a “turbulent” year.
He said: “As the first national lockdown took hold in Spring, the Council was able to play a decisive role keeping the market open for those who wished to choose the option of equity release.
“I was delighted that we were able to leverage our unique market position representing all market participants, and particularly our legal members, to provide a temporary modification to our face-to-face independent legal advice standard.”
Going forward, More2Life’s Mr Harris said he believed technology would remain “very much” on the agenda.
He commented: “For advice firms in particular, looking at how digital processes can cut down on administration, improve record keeping and make it easier to reach potential clients and their families will be vital.”
Indeed, advisory service Equity Release Supermarket found that while face-to-face meetings between advisers and clients had steadily increased in Q3, its video communications channel, launched in April, had continued to grow in popularity, with a 3.7 per cent increase on the previous quarter.
But a survey of advice firms in May by More2Life found that only one in 10 later life lending advisers thought the lifetime mortgage market would have developed a broader range of customer communication options when the industry returns to pre-Covid operating models.
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