How equity release is making lockdown easier for some homeowners

In recent years equity release has been growing in popularity as a choice for homeowners to make more from the money that they currently have tied up in their property.

But for those in the industry, it did look for a while that the Covid-19 crisis and the resulting lockdown would make it much harder for equity release to be an option.

This was due to the fact that individuals are generally required to have face-to-face advice before they can take out equity release. However, it now appears that things may have changed and equity release has once again become a viable option.

Updates from the Equity Release Council

Yes, under normal circumstances, it is a requirement that individuals should receive face-to-face advice before they take out an equity release policy. However, these are hardly normal circumstances. In light of lockdown and the coronavirus outbreak, the Equity Release Council has updated its policy on a temporary basis, and this means that legal advice can now be provided remotely rather than in a direct face-to-face setting.

This advice has been certainly seen as a positive across the industry, as it means that advisors and specialists will be able to do their job whilst remaining within the parameters of government advice with regards to social distancing. Independent advisors will still be able to work with their clients; however, they must also follow a strict set of guidelines to safeguard those customers who may be interested in taking out an equity release policy.

It will be necessary for advisors to fully establish the identity of the client, as well as to ensure the client has the mental capacity and is not under any form of duress or coercion to enter the equity release contract. Of course, they must establish in the case that there are more than one parties in the contract, that all parties agree.

Equity release is ‘going remote’

Like all industries, financial advisors and equity release specialists have been impacted by Covid-19. However, with the new guidelines from the Equity Release Council, it remains possible for specialists to work within the industry and offer services to customers. To do that, the equity release industry has to go remote.

Stuart Wilson, the B2B marketing director at more2life, said:

“While most sales and purchases have stalled to allow for the need for social distancing, equity release is a slightly different story. Indeed, the main sticking points have been the need for face-to-face independent legal advice and the need to undertake ‘physical’ valuations”.

However, many advisors and equity release brokers are finding ways to work with their customers.

John Whyte, a Sussex-based equity release specialist, said:

”We have looked into a range of options to ensure that we can provide equity release advice. We provide appointments via video calls and more”.

How equity release could benefit customers

There is no doubt that equity release is not the right choice for every customer. However, in circumstances like lockdown and the effect it has had on the economy, it is right that people will be looking to explore the options available to them. Equity release gives homeowners the chance to get access to some of the cash that is tied up in their home, without having to sell the property.

Of course, taking out equity release has both advantages and disadvantages, and it is essential that customers get access to impartial advice before they choose this as the option that is right for them. And this is why the updated advice from the Equity Release Council has come at the right time to ensure that policies are available if they are required, but also that customers are getting the advice they need.

Final thoughts

Ultimately, equity release is an important product that can provide customers with extra flexibility and options with their estate. This is certainly something which could be valuable to people across the country during lockdown and beyond. The fact that advice can now be provided within the government’s guidelines is vital in that it protects the health both of advisors, and of their customers.

When the restrictions have been lifted, the Equity Release Council plans to return its advice to normal.


Kindly shared by Annie Button