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Advisors confident about UK home equity release sector

The home reversion specialist’s poll of more than 300 intermediaries found that 77% of those surveyed expect the sector to flourish in the next 12 months, while 22% thought it would remain stable.  Just 1% of respondents expected the equity release market to contract in 2012.
Despite this positive outlook, advisers have conceded that the market still faces a number of challenges in the year ahead.  The main obstacle is public perception, with 77% of respondents admitting that consumers continue to view equity release with suspicion.
Other barriers to progress mentioned included insufficient funding limiting product choice, a lack of Government support and fears over existing providers withdrawing from the sector.
‘Despite the best interests of those operating in the sector, it is unfortunate that the equity release sector still suffers from something of an image problem,’ said Peter Welch, head of sales and distribution at Bridgewater Equity Release.

‘Equity release can be a fantastic option for many older homeowners looking for a solution for their housing and financial needs, and specialist advisers are fully equipped to deal with any concerns or questions that consumers may have. It would also be helpful for the future health of the sector if the government was to promote its usefulness and help dispel the myths surrounding it,’ he explained.

‘That said it is certainly pleasing to see advisers upbeat about the sector and fully anticipating it to grow in 2012. We face a number of deep-seated economic issues in this country including pension provision, long-term care needs, and the standard of living into retirement which equity release could legitimately provide a solution to,’ he  continued.

‘There is an inordinate amount of stored up wealth in thousands of properties across the country however there is still a reticence when it comes to using that equity even though it could help many people as they grow older. This has to be recognised and supported by all stakeholders as we move forward; these are problems which are not going to go away and it is important that we work on the full range of potential solutions rather than shy away from making these substantial and difficult decisions,’ he added.