Last month Claire Barker, Sanjay Gadhia and Amanda Parsons were given Equity Release Awards for their work during 2020. We asked them to reflect on that period and give their views on the year ahead.    

The world was turned upside down last year. On a personal level, it forced us to acknowledge all those things we took for granted but there were far-reaching consequences for our professional lives too.

As the property market ground to a halt last March it looked like the equity release industry would too. Lockdown presented immediate challenges. Equity release is one of the few financial products where face-to-face advice was considered the norm, putting it at odds with the regular mortgage, pensions and life assurance market.

Making the necessary changes to the advisory and legal process presented logistical challenges and the suspension of in-person valuations created inevitable delays. Only through a collective determination to keep going did the industry keep moving.

“It started well but we saw it fall off a cliff in April and May [2020] as the supply chain went into overdrive to enable business to be transacted safely,” says Claire Barker, Managing Director at equity release legal advisers Equilaw.

“The outcome was that clients were able to proceed and serious levels of business continued to be written,” says Amanda Parsons, Director of AAP Financial Solutions. “This has probably strengthened the individual parts of the process and also meant we’ve had to work more collaboratively to resolve issues. I think this has left the sector in a better position in terms of resilience and ability to adapt and change as required.”

Financial services are always changing and improvements take time but it seems the pandemic has allowed the industry to accelerate adoption of a raft of efficiencies that would have taken a lot longer, though not all will be here to stay.

“What we’ve seen is a fast-forwarding of what would have inevitably evolved over a longer period,” says Claire. “By that, I mean that there has been a greater use of technology and a general willingness to revisit how we all work. With that came challenges around ensuring that customers’ immediate needs were met, while avoiding increased fraud attempts, duress and verifying mental capacity. It was by no means seamless but I think we all learned a lot from it.”

Sanjay Gadhia, Business Development Manager at more2life agrees. He has noticed more lenders providing paperless application journeys, increased competition and has also sensed the opportunities presented by these great leaps forward.

“The sector has adapted immensely to the pandemic and I certainly see some of the changes remaining in place post-pandemic. We need to focus on understanding the lessons taught by the pandemic and hanging on to those that serve the sector and its customers well.”

However, as a lawyer, Claire is keen to see face-to-face legal advice make a return as soon as possible because it offers reassurance and ensures the customer understands the long-term commitment they are signing up to.

There have been changes at the customer end too, with greater demand for equity release products from those wishing to help loved ones onto the property ladder, according to Sanjay.

“Equity release plans became more needs-based to support applicants’ income and, increasingly, to gift money to help children get on the property ladder. The Stamp Duty relief has certainly played a part in driving that.”

Amanda has noticed the same trend. She believes the pandemic has prompted people to consider the option of equity release.

“We have seen more interest, not just in my business, but also reported by other firms, of more clients looking to help family members who may have been hit by the effects of the pandemic.

“The property market has so far been relatively untouched by negative effects, so we have benefitted from steady valuations most of the time and low interest rates due to economic conditions. Perhaps, with lockdowns keeping people at home more, clients and families have had more time to look into financial planning.”

Concerns about the impact of coronavirus on residents living in care homes may also result in changes to individual behaviour and how they wish to be cared for in the future.

“The huge and devastating impact of the virus on care homes is likely to encourage more people to look at living independently in their own homes for longer or live with family in the future,” says Amanda.

“This is likely to mean we need to review the wealth trapped in property assets even more closely in the coming months and years as we facilitate a change in attitudes towards care for our older citizens.”

Broadly, our experts are very optimistic about the future, though there will be bumps in the road.

Claire says some businesses may not survive if they haven’t been able to cope with the demands of lockdown but those that remain will benefit from a rally in activity because the sector’s demographic is “champing at the bit” to get their lives back.

“People’s lives have essentially been on hold for a year and, for older people, that time is even more precious. We can see that many will want to spend quality time with their families, probably going on longer and more luxurious holidays together, as well as making the decision to live for the moment because life is short and full of unknowns. Those decisions require money.”

Claire, Sanjay and Amanda all expect increased product innovation in 2021 and Amanda is in no doubt which direction the sector will now take.

“I think the market is going to be very busy, innovative and will thrive over the coming years.

“We have a great product, a solid base of advisers and enthusiastic providers who all share common goals of making lifetime mortgages mainstream, safe and suitable.”

• This feature was kindly sponsored by Pure Retirement which was named best provider for both product innovation and development and support, at the Equity Release Awards. For a full list of all the winners and more from the individuals that were honoured click here.