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Equity Release Supermarket bucks the market trend with a record first half of the year

Equity Release Supermarket

The Equity Release Council’s (ERC’s) first-half 2019 report released today shows that the market has slowed dramatically in H1 19 vs H1 18, whereas Equity Release Supermarket (ERS), one of the leading independent equity release advisory services, enjoyed record growth.

As the ERC’s data shows, total equity release lending grew by just 0.5% from H1 2018 to H1 2019, whereas ERS saw 17% growth during the same period. A similar story was seen with the number of new customers. The ERC saw the total number of equity release customers increase by just 0.4% YOY, whereas ERS saw a 17% increase in the same period.

Mark Gregory, Founder and CEO of Warrington-based Equity Release Supermarket, commented: “The equity release markets meteoric growth over recent years has obviously slowed dramatically but this is to be expected given current economic uncertainty which has a domino effect, impacting consumer confidence. The Bank of England recently reduced its forecast for Q2 economic growth from 0.2% to zero and June 2019’s Consumer Confidence Index* fell again. Consumers expectations for the UK economy are now 8 points lower than they were in June 2018.

When consumer’s lack confidence, they tend to put off making big financial decisions – and taking out equity release is obviously a decision that must be carefully considered. We’ve seen the same trend before which has impacted the market in the short term. I believe we are simply seeing this again as all the long term growth indicators for the equity release market are still in place – such as the shortfall in pension provision, the need to repay debt in retirement or older people’s desire to support their children financially.

We are bucking the market trend at Equity Release Supermarket for a number of reasons. We relaunched our brand with a new website in December last year and since then we’ve seen site user numbers increase by over 20% and the average time on site has increased by over 40% YOY. People are hungry for information to help them with their decision making and at Equity Release Supermarket we offer a market leading range of free to use digital tools, calculators and information.

We’ve also increased our adviser numbers, developed our Training Academy and enhanced our back-end processing.”

Additional findings by ERS help to build a more complete picture of the equity release marketplace. As part of their continuing efforts to better understand their customers, ERS have found that the most common uses for equity release have remained stable year on year. The most common reason given was to repay an outstanding mortgage (25%), followed by home improvements (19%) and gifting to children (15%).

Equity Release Supermarket also saw strong growth across all regions with the exception of London where the share of total lending fell from 10% to 8% YOY. This is reflective of the continued fall in house prices in the capital and the wider metropolitan area. The Nationwide House Price Index for June 2019 reported that London house prices fell 0.7% YOY.

Strongest growth was seen in the North, reflecting the relatively buoyant housing market. The North East share of equity release lending grew from 2% to 4% in H1 YOY, while in Yorkshire and Humberside lending grew from 6% to 7%.

ERS are also seeing shifts in the ages of their customers when they take out equity release YOY. The 55-59 age group has fallen by 17%, the 60-64’s by 10%, whereas the 65-69 age group has increased by 18% and the 70-74s by 30%. The most popular age to take out equity release has now moved to 65-69, with 26% share.

Mark Gregory concludes: “First half growth in the equity release market has been slow in comparison to previous years due to short term economic uncertainty. That said, the long term growth indictators for the market are still in place. Alongside continued lender product innovation and a low interest rate environment, I believe equity release continues to have a bright future. That said, the industry needs to do more to educate consumers about the benefits of equity release as a recent report showed that 77% of people would definitely not consider it as a way to fund their retirement.** The record growth we’ve enjoyed at Equity Release Supermarket in H1 2019 is a reflection of the investment we’ve made in our award winning digital offering, providing a market leading range of free to use calculators, information and comparison tools.”

*GfK Consumer Confidence Index, June 2018.
**Equity Release Schemes, Mintel, May 2019.