Which market saw January enquiries nearly match the whole of 2023?

Sector appears to be gaining traction…

Which market saw January enquiries nearly match the whole of 2023?

Amid the myriad of challenges that have beset the housing market in recent years, from the cost-of-living crisis to the far-reaching effects of the COVID-19 pandemic, stability appears to be gradually returning in 2024.

One sector that appears to be gaining traction is the equity release market. Mortgage Introducer recently gained insights from a panel of brokers to gauge the performance of the segment.

How is the equity release market performing in 2024?

Rowan Frayling (pictured left), managing director at J Finance, said the later life lending market had experienced a resurgence after a relatively stagnant year in 2023.

“Personally, we observed a significant uptick in enquiries in January 2024 alone, nearly matching the entirety of 2023,” he said.

Frayling said, there is a palpable momentum toward addressing broader lifestyle goals like holidays and home improvements. As such, he believes it is crucial for lenders to prioritise product innovation to meet evolving consumer needs, such as the introduction of interest-serviced options.

Nevertheless, he added that inherent challenges persist, including higher rates and lower loan-to-value (LTV) ratios compared to previous years.

“However, the impact of these challenges has somewhat diminished over time, reflecting a shifting landscape where borrowers and lenders alike are adapting to new norms and expectations,” Frayling said.

Looking ahead, while market conditions may fluctuate, he believes the emphasis on continual product evolution and customer-centric solutions remains paramount.

“As the later life lending market continues to evolve, addressing both practical needs and aspirational goals will be pivotal in sustaining its growth trajectory and relevance in the financial landscape,” he added.

Is the equity release market becoming more flexible?

Stuart Powell (pictured right), managing director at Advice Guru Ltd, said, in 2024, the equity release market is undergoing a seismic shift.

“Remarkably, a significant portion, 40%, of equity release lenders, have introduced products with features that cater to evolving consumer needs,” he said.

Recognising the demand for higher LTVs and the changing regulatory landscape shaped by the Financial Conduct Authority (FCA), particularly through initiatives like the Consumer Duty and comprehensive market reviews, Powell said, these new hybrid products represent a long-awaited evolution.

By incorporating affordability checks for all consumers, he said, these products prioritise responsible lending practices while empowering individuals to unlock the value of their homes.

“An illustrative example of this paradigm shift is seen in the experience of Mr. and Mrs. X; by opting to pay the interest on their equity release, they not only saved a substantial £5,400 over the expected term of their mortgage, but also benefited from a noteworthy 0.45% reduction in their interest rate,” he said.

This, Powell added, demonstrates how embracing innovative features can yield tangible financial advantages for consumers.

As the equity release market continues to evolve, Powell believes it is clear that traditional notions are giving way to a more dynamic and consumer-centric landscape.

“With a focus on flexibility, affordability, and value creation, the industry is poised to redefine the very essence of equity release, opening new avenues for financial empowerment and security for homeowners across the UK,” he said.

What trends have you seen in the equity release market so far in 2024? Let us know in the comment section below.