Lending is expected to exceed £100m in 2015 with a significant increase in 2016.
The Lifetime Mortgage market has shown strong growth recently, and looks set to become an increasingly popular way for consumers to benefit from the equity tied up in their homes. Lifetime mortgages enable customers to release much needed funds to provide for their retirement and later life, as the cost of care is growing and property values continue to rise in real terms.
The equity release market grew by 29% in 2014, and the Lifetime Mortgage market is forecast to grow to over £2.3bn by 2019.
Over 60’s in the UK own nearly £1.3 trillion of housing equity giving plenty of scope for market growth.
Bernie Hickman, Managing Director, Individual Retirement at Legal & General, said:
“The launch of Legal & General Lifetime Mortgages marks an important and significant point in the evolution of our retirement business. In the UK there is a clear need for housing to play a more central role in helping create better outcomes for more people, particularly as they progress deeper into retirement. The market is growing and we want to be known as a brand that helps more and more people release the money tied up in their property.”
Will Hale, Key Retirement Solutions, Business Director, commented:
“Legal & General have brought their expertise to bear in this increasingly important market. It’s early days but so far we have been impressed with both their offering and their commitment to bringing a range of new products to the market coupled with a service proposition that will make life easier for both us and our clients.”
Nigel Waterson, Chairman of the Equity Release Council, added:
"Today's announcement from Legal & General is another important milestone as the equity release industry continues to shift into a higher gear. Its arrival will help to build on the strong momentum already in the market, which has seen a surge of lending and innovation in recent years.
"Strong demand for equity release is all but guaranteed as the population ages and its housing wealth grows to a size far greater than many people's pension assets. This is an exciting time to be part of a rapidly growing industry, and we hope to welcome more new providers and advisers to the existing ranks in the months ahead.
"Competition for business will help equity release continue its march into the mainstream, so that more people can take what is often a logical step of using their property assets to boost their finances later in life."
Andrea Rozario, Chief Corporate Officer at Bower Retirement Services, said:
“Legal & General’s launch of its own branded lifetime mortgage is a major endorsement of the equity release market highlighting how leading insurer recognises the growth story.
“They are targeting £100 million of lending this year and significant expansion next year – but even more important is their focus on innovation with talk of new products including a five-year fixed rate interest-only deal which will help the 120,000-plus over-65s estimated to be coming to the end of interest-only deals by 2020.
“Combined with the news that Retirement Advantage has had to pull deals because of strong demand it underlines the pace of expansion in the market. Advisers need to ensure they can meet the demand and that they are committed to maintaining high standards of service.”
