You are here: cherry > Press releases for March 2010 > Bridgewater Equity Release reveal results of independent sale and rent back survey

31 March 2010

Bridgewater Equity Release, the home reversion specialist, has today (31st March 2010) revealed the results of an academic survey conducted by Northumbria University with its support. The survey looked at equity release adviser’s attitudes and experience of the sale and rent back (SRB) market. The research results come just three months before full regulation of the SRB market on the 30th June 2010 and provides adviser viewpoints on various aspects of the market including regulation, client suitability and take-up, case management, commission levels, and attitudes to current market providers. The vast majority of respondents (96%) were wholly in favour of full regulation of the SRB market; currently the market is subject to interim regulation of which 75% of advisers were aware. Of the 131 advisers who responded, only 16% had a client who had already entered into an SRB plan. The vast majority (67%) of these advisers had not been involved with the client’s SRB plan so had not advised the client to take the SRB themselves. This may suggest these clients had gone direct to the providers without advice, perhaps as a result of seeing an advert in the paper. Those advisers who had been involved in the advice described their experience as predominantly satisfactory. 34% of advisers had seen clients for whom an SRB plan would be suitable over the last 12 months which when taken together with the above results, suggests advisers have some issues with advising clients to take an SRB even though it was suitable. Almost all those who responded to the survey (97%) advise on equity release products but only 24% are either ‘likely’ or ‘very likely’ to advise on SRB under full regulation. However, a further 39% said it was possible they would be active in the sector and 38% said they would be likely to advise if a ‘widely recognised financial services industry provider’ entered the market. This further suggests some caution by advisers but an awareness of a possible market. Finally, the survey shows a mixed bag regarding attitudes to provider commissions. The greatest proportion (37%) of advisers deemed a provider commission rate of 1-2% to be an appropriate payment on completion of the SRB plan; while 23% said they would charge the customer a fee instead, possibly demonstrating a wider move to fee-charging generally. Peter Welch, Head of Sales and Distribution at Bridgewater Equity Release, said: “The results of this survey into adviser attitudes to sale and rent back provide an interesting insight into the depth of the current SRB market, the adviser’s place within it and future intentions. The results may suggest that clients have taken out these plans without advice so this is where regulation should benefit clients and it is clear that advisers are fully supportive of SRB regulation. However, it is likely that this regulatory change will make it increasingly important that consumers can access advice if needed, so the apparent adviser caution relating to this product may be concerning for those offering these products. “Clearly, advisers are only seeing a small number of clients who are potentially suitable for such plans. This may suggest that, for most individuals, SRB is regarded as a product of last resort. “Taking all this, and the fact that many advisers are also unsure of their future involvement with the sector going forward, it seems the market has a lot of work to do to change attitudes. This should sound familiar to the equity release market. Both equity release and SRB needs advisers in this area otherwise it risks individuals taking out these products when it is not appropriate and/or when more suitable product alternatives are available. “It would also seem that many more advisers would consider entering or continuing in the sector if a more widely-known provider was active in the marketplace but this is only likely to happen if the market size is attractive and distribution as always is key. The current providers have work to do to gain adviser’s trust and it will be interesting to see how the full regulatory regime impacts going forward.” The SRB survey was carried out by Northumbria University at the start of March this year. Surveys were sent to 1,139 individual adviser email addresses and the survey was completed by 131 respondents, giving a response rate of 11.5%. Bridgewater Equity Release recently finished runner-up in the ‘Best Equity Release Provider’ category at the MyIntroducer.com 2010 Industry Awards. For more information on Bridgewater Equity Release, visit: www.bridgewaterequityrelease.co.uk ENDS For further information please contact: Peter Welch, Head of Sales and Distribution, Bridgewater Equity Release, Mobile: 07824 412439 Rob Griffiths, White Dragon Communications Ltd, Tel: 01483 549282, Mobile: 07983 641566; rob@whitedragoncomms.co.uk Notes to editors Bridgewater Equity Release Limited was founded in 1998 and is the UK’s leading provider of home reversion plans with over 3,000 home reversion customers. Bridgewater Equity Release Limited is an award-winning provider and a member of Safe Home Income Plans (SHIP), the company dedicated to the protection of plan holders and the promotion of safe home income and equity release plans. Bridgewater offers a range of plans which abide by the SHIP Code of Practice. It is committed to ensuring that all its customers are fully aware of the scheme they are entering into and have considered all alternatives. Bridgewater Equity Release is a subsidiary of Grainger plc, which was established in 1912. Grainger plc is listed on the London Stock Exchange and is the largest quoted residential property owner in the UK. Bridgewater Equity Release Ltd Citygate, St James’ Boulevard Newcastle upon Tyne Tyne and Wear NE1 4JE Tel: 0191-242 4820 Fax: 0191-269 5974 E-mail: enquiries@bridgewaterequityrelease.co.uk

Click below to download the full press release