Article date: 29 May 2003
Any lingering fears about equity release plans appear to havebeen banished – most IFAs would now feel comfortable applyingfor such a loan themselves.
Eight out of 10 IFAs said they would consider taking out anequity release loan for themselves, a friend or family member,according to research published today by Norwich Union.
IFAs’ growing belief in the products reflects a broaderacceptance among the public. In fact, the study found that 82% ofthose IFAs already selling equity release believe they will sellmore this year.
Meanwhile, 72% of those not currently selling the product expectto do so within five years.
Every year thousands of Britons over 55 use equity release plansto free up the value held in their properties. And withequity-based investments having been hit by recent falls in worldstock markets, Norwich Union expects more and more people to lookto the equity in their home to fill gaps in their retirementfinances.
The study confirmed a turnaround in the perception of equityrelease plans since the 1980s. At that time a lack of regulationand mis-selling by some providers caused concerns.
However, Norwich Union entered the equity release market in1998, and since then the products on offer have been fundamentallydifferent. They include safety features* to protect customers fromthe pitfalls of the past such as a "No Negative EquityGuarantee".
Also, leading lenders such as Norwich Union belong to thevoluntary organisation SHIP (Safer Home Income Plans), which wasset up to encourage higher standards.
Paul Stokes, head of marketing for Norwich Union Equity Release,said: "Equity release plans work well for people who want to usethe value of their home to create extra cash. Since we entered themarket in 1998, we always believed that it wouldn’t be toolong before equity release became readily accepted by IFAs as a keypart of their product mix. Given that most IFAs would now considersuch a product for themselves and their families, I’d saythat time has now arrived."
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Notes to editors
* Norwich Union’s "No Negative Equity Guarantee" ensuresthat customers will never owe more than their property is worth. Wewill never ask the customer or the customer’s estate to repaymore than the open market value of the property.
- The survey was commissioned by Norwich Union and was carriedout over the telephone during November 2002 amongst 319 IFAs.
- Sales of equity release have doubled in the last two years andthe Council of Mortgage Lenders projects the market could rise to£50 billion by 2008.
- Minimum property values apply. Equity release is a lifetimeloan secured against your home. CHECK THAT THIS MORTGAGE MEETSYOUR NEEDS IF YOU WANT TO MOVE OR YOU WANT YOUR FAMILYTO INHERITIT. IF YOU ARE IN DOUBT, SEEK INDEPENDENT ADVICE. A personalillustration and full terms and conditions are available onrequest. Norwich Union equity release limited No. 3286484.Registered at 2 Rougier Street, York YO90 1UU. Not available inNorthern Ireland, the Channel Islands and the Isle of Man.
- Norwich Union is the UK’s largest insurer. It is aleading provider of life, pensions and investment products and oneof the leading IFA providers. IFAs provide around 70% of thecompany’s long- term savings business.
- Norwich Union has strategic alliances with building societiesand other leading UK brand names including Tesco Personal Financeand The Royal Bank of Scotland Group.
- Norwich Union’s news releases are available on the Avivaplc website at www.aviva.com.