Equity Release Group say the market could take years to recover despite renewed confidence and optimism.

29 October 2024

The UK’s leading whole of market equity release experts, Equity Release Group (ERG) have reported a significant uplift in their enquiries this year, announcing amplification of their lead volume by 102 per cent YoY in September and lending applications up 52 percent in comparison to the same period last year

Recovering UK house prices earlier in the year certainly had a widespread effect on the sector and ERG believe that some of the increase is also down to retirees exploring their options after years of rising costs and the impending tax changes.

Mark Gregory, Founder and CEO of Equity Release Group said: “Whilst we’re seeing a marked improvement within the industry, alongside our current data, which reflects optimism and demand, there is still some way to go before the market fully recovers and will likely take a few years.”

The 2024 Autumn Budget, set for tomorrow, will be one of the most closely watched in recent years. With the new Labour government facing significant economic challenges, Prime Minister Keir Starmer and Chancellor Rachel Reeves have indicated that tough measures lie ahead.

Nervousness around this announcement and the implications it may impose on those planning their retirement, is giving rise to people reviewing alternate funding options to support their later life goals, some of whom are turning to equity release as a potential solution.

Mark said: “The Statement is likely to bring financial planning and life goals sharply into focus with potential tax reforms on the horizon, particularly around capital gains, inheritance tax, and pensions. However, releasing property wealth is a tax-free source of capital for many in need of options, outside of a traditional pension or other savings.”

ERG also reported heightened usage in Q3 YoY on customers utilising monies released from ‘additional borrowing’, which was up 5 per cent, as well as usage for ‘emergency funds’ which grew 2.5 per cent – both of which could be reflective of the current market sentiment. Whilst repayments on residential property mortgages increased, ‘gifts to family’ decreased, suggesting that people are in need of more readily available cash for existing financial needs as opposed to longer term goals.

Mark commented: “Our recent Q3 data has highlighted that our customers, more so than ever, have a need to compare later life lending products accurately for the best rates, features and overall solutions that meet their personal requirements. Therefore, expansive technology features, alongside independent and whole of market advice, are vital to meet consumer demands in line with Consumer Duty.

“We have spent copious amounts of time driving efficiencies within the business. An area of which has been the compelling reduction in our lead costs. Implementing a more productive marketing and engagement strategy has enabled us to produce double the number of leads with an 85% reduction in budget without changing our core customer journey which is based on transparency, choice and independence.

“We know in general that there’s still a lack of understanding around products and features, therefore some people remain sceptical or have misconceptions about the industry. However, we are changing this. The readership of our educational content also grew 600% on our site vs 2023, and we are driving trust in the market though our marketing campaigns. Therefore, with accessibility and knowledge sharing this information can help the market recover faster.”

ERG’s report also identified that equity release applications were the highest within the South East, South West and North West of England, which remained the dominant regions.

Mark added: “Our aim is always to push for greater accessibility, transparency and make it easier for people to explore all their equity release options, comparing the market, rates, features and gaining access to whole of market, independent, quality advice.”

Equity Release Group have announced multiple new product launches, platform developments, new partnerships and affiliations over the last year and are set to announce further high-profile partnerships, as well as more new hires over the coming months.