Despite the horror stories of corruption and miss-selling of financial products in recent years, the Equity Release Council heavily regulates the equity release market and there is protection in place for consumers.
Press and media attention since the global financial crisis has brought distrust and a wariness not to mention unstable markets and worrying times for homeowners as the housing market has taken a battering over the last few years.
Equity release has been one of the areas of the mortgage market that has come out thriving and this is due to consumers who have used equity release as a life saviour which has enabled them to remain in their homes during retirement. It has brought a new lease of financial affluence to many people who were once concerned that their private pension plans may not cover their retirement. We must remember that pensions have not had the greatest press, either. For many who could not afford a private pension the equity release market has been a godsend for those who simply could not stretch to piling cash into a private pension scheme and could only afford their mortgage repayments during their working years.
The Equity Release Council ensures that products that are offered on the market are safe and easily accessible to consumers. Each provider who is a member of the council has to satisfy certain criteria in order to actively participate in the market. There is a code of conduct laid down and each member has to adhere to that conduct or they can be stripped of their right to sell the product. Heavy fines are in place for any misconduct and in the days of modern technology, it doesn’t take long for bad press to make the rounds. The council operate a complaint’s procedure for any consumer and this is independent of any association with any member of the council.
Previously, there have been major high street banks that have entered the equity release market and as the market has shown great signs of profit new lenders are cropping up again. The National Westminster Bank was in the market previously and there could be a re-joining of the market from banks along with other major lenders as movement begins to improve.
With the ever-expanding brand of enhanced lifetime mortgages, there is always room for added benefits and features as we have seen with the four main providers. New angles on the base brand will attract potential consumers and with the safety of the market regulated, there is renewed hope the enhanced lifetime mortgage market is now a safe way to increase financial ease within retirement. Flexibility on repayments is now being used by some of the newer lenders to the market and the worry of selling a home if residential care is needed is slowly dispersing with more options available for home care.
The Equity Release Council offers security for both lenders and consumers and undertakes detailed annual reports on the equity release market. Membership of the scheme restores faith in the selling of financial products and the council operates strict regulating procedures on providers within the market.
In general, the news is positive for the equity release market and with other 2-3 million people per year due to retire in the next fifteen years, there is increased faith in the equity release market with more people turning to their homes to maximise their income during the years when a working income is no longer possible. The increase of health conditions has also enabled more people to borrow larger amounts of money as more people are living with chronic conditions for longer periods of time. The Equity Release Council’s strident regulations also make for a favourable equity release market and reduces the fear of misconduct in a strong market for those who have no pension to rely on.