This article was published prior to the publication of the post-Brexit agreement between the UK and EU which covers the relationship between the UK and EU following the end of the implementation period (commonly referred to as the “transition period”) created by the European Union (Withdrawal Agreement) Act 2020, and should be read in that context. For up-to-date commentary and information on our services, please see our Beyond Brexit page.
The Equity Release market has been a rapidly growing market in England with record amounts released last year (£1.6 billion) and a record number of 22,500 taking out an equity release scheme in 2015.
The entrance of Legal & General into the sector in early 2015 and One Family in 2016 has, in early 2016, seen unprecedented growth and demand for a lifetime mortgage. Has Brexit impacted on this growth and demand and is the market wobbling?
Peter Barton, Head of Ashfords Equity Release Team, reports:
"On Friday 24 and Monday 27 June I attended two Equity Release events and can report first hand that the room was buzzing with anticipation, with lenders reporting strong cash reserves and equity release lending being funded from their own self-generated money rather than having to look outwards for funding."
The lenders remain positive, with further new entrants launching in the autumn and winter of this year.
For those at retirement borrowers remain positive. The Ashfords Equity Release Team has not reported any withdrawals due to Brexit fears, and indeed there has not been a rush of applicants worrying lenders will run out of funds. Demand continues unabated. The only potential fly in the ointment (or crack in the foundations) is the impact on property prices. Currently lenders are remaining positive on house price stability but only time will tell. Even if house prices drop temporarily this will not slow the take-up of lifetime mortgages (unless it prevents borrowers borrowing sufficiently to clear existing debts). What it may mean is that borrowers go back to lenders again in the future when house prices creep back up again.
So for our at-retirement market the outlook remains relatively unchanged, supply continues unaffected, lenders appetite remains and the demand is still there.