The Intermediary – February 2025 - Flipbook - Page 64
L AT E R L I F E L E N D I N G
Opinion
Steady growth
or fleeting
market frenzy?
W
hen you tell
someone
you work
in financial
services, I
suspect they
imagine either a grey office with grey
people shuffling paper, or the excesses
of the ‘Wolf of Wall Street’.
Thankfully, neither of these
pictures is true – although we have
seen some spectacular ups and downs
over the past 20 years. The impact
of Pension Freedoms on retirement
planning and the infamous Liz
Truss mini-Budget of Autumn 2022
spring to mind.
The laer was particularly
challenging for the residential
property market, and while we saw
the Bank of England reduce rates
recently, there is still a long way to go
until we hit mortgage rates at levels
seen in 2020. Even the equity release
market – where rates are pegged
to gilts – did not escape unscathed,
and we went from record lending of
£6.2bn (2022) to £2.32bn (2024).
Now, I would be lying if I did not
acknowledge that we would like to
have seen more lending last year,
but the picture is actually far from
gloomy. Indeed, Q4 2024 was the
third consecutive quarter when we
saw growth in both total customer
numbers and total lending.
While there is still a long way to
go, the dial is moving in the right
direction, and we are starting to see
more product innovation as well.
loan-to-values (LTVs) as a result.
This was especially welcome in a
low LTV environment following the
2022 Budget.
Keen to extend the same protections
to PTLM customers, the council
worked hard with its Standards
Commiee to develop standards
which covered these innovative
mortgages, and these were launched
in February 2024.
No ERCs
Due to the duration of equity release
products, early repayment charges
(ERCs) can be unpopular with
customers, but more2life tackled
this in 2024 by releasing a product
which boasted a slightly higher rate,
but no ERCs should the customer
choose to redeem. With interest rates
higher than we’ve seen for a few
years, Standard Life Home Finance
and Pure also unveiled interest served
ranges, which offered lower rates for
customers prepared to make regular
voluntary payments.
Livemore also stepped up, launching
products which catered to nonstandard construction and – in 2025
Welcome products
In late 2023, Legal & General launched
the first Mandatory Payment Term
Lifetime Mortgage (PTLM) products
which, for the first time, mandated
payments for a set period, allowing
customers to benefit from increased
64
The Intermediary | February 2025
Sustainable expansion is what the industry needs
KELLY MELVILLE-KELLY
is director of risk, policy and
compliance at the Equity
Release Council
– a lifetime mortgage with a six month
offer period aimed at home movers
and buyers.
It’s not only providers that have
stepped up, but advisers as well.
Equity Release Supermarket released
its new business-to-business platform,
Equity Release Partners, and Mortgage
Advice Bureau integrated equity
release into its later life services.
Following three consecutive
quarters of growth, 2025 has the
potential to be a pivotal year for the
equity release market.
Innovation is gathering pace,
lenders are adapting, and advisers
are embracing new ways to serve
customers beer.
While we may not be in for a
Hollywood-style rollercoaster,
a period of steady, sustainable
expansion is exactly what the industry
needs. That, in the long run, is far
more rewarding than any fleeting
market frenzy. ●
