The equity release market is reaching “only a fraction of its potential” despite strong recent growth, says later life lending platform Air.
This is evident from figures from the Equity Release Council Total lending grew by 11% last year to £2.57 billion. Research from its advisors shows that 80% expect total lending to continue to grow this year and the number of new customers to increase.
However, Air highlights that total lifetime mortgage lending amounts to just 8% of total elderly lending, at £25 billion, despite innovation in the products that make them relevant to a significant number of homeowners over 55.
It says the number of new clients releasing shares rose by less than 1% last year, showing a lack of awareness among clients and advisers who are not later life loan specialists.
Will Hale, CEO of Air and Key Advice (pictured), said: “The sector is still performing at a fraction of its potential, despite the very welcome growth in overall lending last year and the prospect of more to come.
“Innovation in lifetime mortgages means they are highly relevant to a growing number of homeowners over the age of 55 and their needs. However, it is clear that the lack of awareness among customers and advisers, alongside lifetime loan specialists, is preventing them from being offered lifetime mortgages.
“Given customer needs, the £25 billion life insurance market should be higher and the share of lifetime mortgages should also be higher. The products are there, but mortgage, pension and wealth advisers need to look beyond their silos and offer holistic advice.”