Key Retirement plans to use its scale to address what it has branded the "faltering solicitor market" it believes is hampering those seeking to use soaring property values to fund post-work lifestyles.
Will Hale, director at Key Partnerships, the business to business referral arm of Key Retirement, said there were very few law firms operating in the equity release market and some of those which did do not have customer-friendly processes.
He said this issue was affecting those seeking to release cash from their home, because it meant money was paid out slower than necessary.
Mr Hale said there were probably “six or eight” law firms operating in the equity release market.
But in recent years there has been a massive growth in demand for equity release which Mr Hale said would mean change might be needed.
The total value of equity release lending in the first quarter reached £697m, up by 77 per cent from £394m for the same period last year.
This follows a record breaking 2016 in which annual lending reached £2.15bn.
Mr Hale said: “There is a question market about whether [half a dozen law firms] is enough and whether these firms are investing enough in technology to make sure they can keep up with the increasing volumes as well.
“We have invested a lot of money in technology and whilst that is working effectively, it is the solicitor side where things slow down significantly.
“We can use our influence in a number of ways. We do make sure that we make positive to consumers about solicitors who we know do the job properly and firms that don’t do the job properly, we will be less than keen to promote their services in the way we do currently.”
According to the Equity Release Council's website, there are 28 law firms across the country that provide legal services to those wanting equity release.
However many are smaller firms that restrict their services to a very local area.
By comparison, Key Retirement claims to be the country's largest equity release adviser, arranging 35 per cent of all Equity Release Council approved plans.
Mr Hale said some law firms felt they could address this growing demand by “throwing bodies at the issue” but he questioned whether this was sustainable.
He said Key Retirement was having conversations with law firms which don’t operate in the equity release market to encourage them to enter it.
Mr Hale said: “The more competition there is in the market, the more that will drive people to invest in technology and look for a competitive advantage.”
Ron Radway of the Essex Equity Release Advice Centre said: "This is a real issue. The day-to-day conveyancing of equity release can be a bit of a nightmare.
"Whenever you go to a solicitor with a problem, whatever area of law it is, the answer is always yes but what their experience is can be a bit minimal.
"In most cases with unpractised solicitors, the broker is also unpractised. If you are doing one a year then you don't know what you are doing."
damian.fantato@ft.com
