Equity release market set to grow

The Council of Mortgage Lenders has published new research on the UK equity release market, which has been developing more slowly than markets in the in the US, Australia and New Zealand.

The report, entitled “Please release me! A review of the equity release market in the UK, its potential and consumer expectations”, looks at the UK market today and its future direction.

Strong growth in house prices, an ageing population and a looming pension crisis all mean that the UK equity release market has plenty of potential.

However, compared to Australia, New Zealand and the US, which have similar underlying fundamentals, the UK has so far seen only steady growth in the market.

Research on the Australian sector shows that consumer attitudes to equity release have been changing.

For example, younger households are more willing than before to make use of their housing assets and are less worried about inheritance issues.

Meanwhile, in the US, the Government has helped the market develop by guaranteeing lenders against loss through some equity release products.

The report suggests that in the UK, the Government needs to come out in support of equity release, which it has traditionally seen as of limited value because it cannot help the poorest in society.

It also refers to negative press coverage on past difficulties in the UK sector which have deterred some larger lenders from entering the market.

The report’s author, Peter Williams, is confident that the UK equity release market will continue to grow.

However, he makes the point that: “it will grow much bigger and faster if the industry moves forward in more creative ways”.

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