Stuart Wilson, chair of the later-life specialist, said the difficulties presented this year have forced the sector to become more flexible and as a result brokers will “continue to play a vital role” in helping customers understand all that is on offer in the year ahead.
Wilson pointed to September’s “mini” Budget as a significant event impacting the sector this year, with interest rates rising sharply in its aftermath.
As a result, some lenders pulled products they felt they could no longer responsibly support.
The number of equity release products available on the market shrunk from 582 in the third quarter of this year to 317 in October.
However, Wilson noted that product numbers actually remain above pre-pandemic levels - 314 products were available at the end of 2019 - and also highlighted that what is on offer now, generally has more flexible features.
“According to Equity Release Council figures, by the end of 2022 it is reasonable to expect that more than 100,000 new or existing customers might look to use the wealth built up in their property through equity release.
"This trend towards growth in the later life sector is something we anticipate will continue into 2023, as product rates gradually fall,” Wilson said.
He added: “Advisers too, anticipate there will be more enquiries into later life lending products in the new year.”
More than half of advisers (51 per cent) reported an increase in later-life lending queries in the last 12 months, while 77 per cent predict a rise in enquiries in the next two to five years, research from AKG showed.
According to Wilson, 2022 was a year that continued to see innovation to support customers across the sector.
“For example, we saw the Equity Release Council announce its fifth product standard in March 2022 which gave new customers the ability to make ERC-free ad hoc payments within lenders criteria,” Wilson recalled.
He also noted that the availability of features like inheritance protection and downsizing protection has also grown this year as “increasing numbers of customers sought out products with more flexibility and protection suited to their individual needs”.
In addition to this, brokers have had to come to terms with the consumer duty.
“While there is no doubt that many in the later life lending sector already meet many of the requirements, there is a difference between including an approach into your advice and ensuring this is evidenced as well as clearly documented which is sure to be a pain point,” Wilson said.