Equity release will be a 5bn market by 2020 says Key's Mirfin
03 November 2016
The equity release market will “comfortably be a £5bn market by 2020” said Key Retirement’s Dean Mirfin at today’s Financial Services Expo (FSE) Midlands at the RICOH Arena in Coventry,
Mirfin predicted that equity release lending levels would surpass £2bn this year before more than doubling in size by the start of the next decade. He suggested this growth presented a major opportunity for advisers, whether they provide advice on the products themselves or refer on to specialist advisers.
“We can’t cope with all that growth which is why there is a major opportunity for advisers,” he said. “No other sector has every demographic pointing towards the sector in such a way. I don’t think there are many sectors that are showing a regular 33% quarterly increase in business, and it’s been going up for the last three years.”
Mirfin highlighted how strong underlying demand for equity release advice is. “Demand is very high,” said Mirfin. “There are lots of these customers out there. For example, we generate 12,000 enquiries per month. Once you start to dip your toe into this market, you will start to find more enquiries. The wider retirement market sphere is going to get bigger and bigger.”
Mirfin was keen to stress the significant number of interest-only mortgage customers coming to the end of their deals that will be left with a significant shortfall and do not have a repayment vehicle in place.
“The first wave of interest-only mortgage maturities is hitting now,” he said. “There will be 40,000 per year for the next few years and it’s estimated that at least 50% of these will have a shortfall and won’t be able to pay anything at all.”
He outlined how many of these customers could naturally move to an equity release product option, suggesting that many could continue to pay all or some of the interest. Mirfin suggested that advisers need to create a ‘liquid cash value’ for client’s homes in order to monetise the available money in their properties and to then factor this in to their financial planning.
FSE Midlands is taking place for the first time at the Ricoh Arena in Coventry today. It provides adviser visitors with access to over 40 exhibitors, from niche lenders to challenger banks to high-street providers, plus mortgage clubs, networks, master brokers, other product providers and specialist operators.
Exhibitors attending FSE Midlands include Nationwide, NatWest Intermediary Solutions, Virgin Money, Accord Mortgages, Kensington, One Savings Bank, CHL, Dudley Building Society, National Counties/Family Building Society and many more.
Further details on all Financial Services Expo shows, please visit: http://www.financialservicesexpo.co.uk/
