Blogs
Please release me…
12 July 2010
The aftermath of June’s emergency budget has seen the re-emergence of equity release in the headlines. Will Britons seek equity release plans to boost retirement income? Will any house price rises boost popularity of equity release plans?
Equity Release first hit the headlines back in January 2006 when Which? Magazine wrote a damming article on the subject, without citing the effects that house price inflation can have on equity release products or looking into what people used their released equity for; they swiftly wrote off the whole equity release market.
Did the whole equity release market shut up shop? No, in fact it was quite the opposite. Product providers began to sit up and pay attention and soon realised the need for them to open the lines of communication with brokers and, in turn, the relevant media.
It is certainly no coincidence that shortly after this SHIP, the trade body for the equity release market, started to become more proactive. Instead of press releases containing nothing but the last quarter’s figures, the written communication became considerably more detailed with analysis of the results as well as separate comment on significant issues such as government policy and new entrants to the market.
This proactive push had, as you would expect, a positive effect. Product providers started producing marketing literature, upgrading their websites and hosting roadshows around the country educating brokers about their products. At the same time they started hiring public relations agencies to assist with the process, and some decided to make in-house hires.
Without a doubt equity release was becoming less of a taboo subject and media coverage, including an exposé on Tonight with Trevor MacDonald, was balanced and objective. There was even talk of equity release products in Coronation Street’s Rovers Return. The hard work was just starting to pay off, and then came the credit crunch.
The result of which is a market that has changed dramatically. The number of providers has fallen from 12 to four and product offerings have shrunk. But the reasons to communicate have not disappeared. In fact the onus is now on these four providers and SHIP to fly the flag for equity release to build on the warm reception it is now receiving from brokers, consumers and the press.
The ageing population and ongoing shortfall in pension provision will almost certainly lead to equity release becoming a mainstream retirement funding vehicle in future and demand for the product continuing to rise. It will be a slow burn, but the market is optimistic that the worst is behind it and is expecting to see new entrants in the coming months and years.
