As it did for a large proportion of last year, the equity release market has once again found itself having to react to levels of consumer confidence affected by wider external events. Last year, political and economic uncertainty and any associated ripple effect left many deferring any major financial decisions, leading to a relatively fallow mid-point of the year, before picking up again at its end with a strong Q4.
Arguably, the heartening thing to come out of that experience was the market’s resilience and its ability to continue satisfying customer needs once the market returned to normal (and the fact that customers’ appetite for later life lending products remained was encouraging in itself). While, in terms of current and likely future consumer behaviours, parallels can be drawn, there has also been the added complications relating not only to processes and procedures, but also in maintaining those all-important links between advisers and lenders.
The changing of processes, and the gradual return to normality
Throughout April, several lenders began pivoting towards remote valuations, including Aviva and OneFamily, and the latter minimising its risks by keeping part of the loan for release when property value was confirmed with a full valuation down the track. OneFamily also adapted its application process further by sidestepping the need for signed forms and allowing advisers to process the case through usual secure online mediums. We moved our Pure Heritage and Sovereign ranges over to desktop solutions in early April, with Classic joining them shortly afterwards to ensure our full range of product suites remained available to customers. Some lenders have additionally gone to great lengths to ensure that those cases affected by the need for a full valuation didn’t suffer as a consequence, chief among them being LV’s commitment to providing customers in that position a six-month rate guarantee to ensure they aren’t left out of pocket.
As changing government guidance has opened up the housing market again, lenders have naturally had to further adapt their activities and processes to continue meeting customer demand in ways that are simultaneously effective and responsible. Full valuations resumed among some lenders from around mid-May, while we in turn tabled a variety of valuation methods on a case-by-case basis and featuring a considered risk assessment in each instance to proceed on cases while also safeguarding customer wellbeing.
Making best use of technology to stay connected
The pandemic, and the need for the industry to adapt, has arguably brought the conversation regarding the sector’s relationship with technology front and centre. The role of ‘robo-advice’ during initial customer research began being talked about in ever-greater detail during May, with the idea of such solutions being used in early consumer enquiries gaining traction. Customer-facing businesses have also taken the opportunity to enhance their technological offering, with Equity Release Supermarket recently rolling out a wider variety of online tools for its customers, bringing the total number of calculators it now offers to nine.
In addition to the virtual events being held across the sector by publications, lenders and adviser firms, the market has also come together to continue providing adviser resources to help them as much as possible during the current landscape. Several lenders - including ourselves - have taken the opportunity to enhance or develop their online portals, providing more streamlined processes to help cases proceed. L&G have taken it one step further by developing an online study portal, allowing advisers the chance to use current market conditions to study for their ER1 qualification and gain CPD points.
The market has had to rapidly adapt and pivot to new methods and technologies to keep trading effectively in the current climate, but based on evidence in recent weeks the market has ably demonstrated that the equity release sector is just as adept at innovating as the rest of the financial services industry.
