The specialist equity release lender, currently one of the largest in the UK, has been providing brokers with a simplified approach to underwriting clients for some time using a short ‘Yes/No’ question set designed to quickly ascertain a client’s eligibility for a possible enhancement to their LTV. The new approach will see the lender offer a tailored quotation, using the same non-invasive health questionnaire, that will lead to an improvement in rates for those in the older age brackets (75+).
Dave Harris, more 2 life’s Managing Director, said:
“The market for enhanced equity release is evolving quickly and as a leader in this area we want to capitalise on the opportunities this presents to us and our customers. Our new underwriting approach will mean we can offer a more bespoke service to brokers and their clients, with a focus on an older age profile where we will offer very competitive interests rate and cash back deals.
“The Budget announcements earlier this year and proposed changes to pension legislation will, in our opinion, open up new market opportunities for brokers as equity release increasingly becomes part of a more holistic approach to retirement planning. Beyond the borders of equity release, we see huge potential in the growth of the ‘Retirement Lending’ market, as retirees increasingly look at other lending solutions – Buy to Let and secured lending, for example – as a way of complementing their retirement financial plan.”
Harris pointed out that enhanced equity release is following a similar trajectory to enhanced lifetime annuities, which evolved from a niche product solution in the 1990s to become a mainstream option today.
“As many as 60% of people reaching retirement age and buying annuities today could qualify for an enhancement based on their medical history and lifestyle and as clients reach their 70s and 80s health issues become more prevalent. Currently, only about 10% of the equity release market is enhanced so this demonstrates the room for growth in this area and we intend to build on our strength and expertise to help grow the market further.”
The lender has produced a range of new support items for Brokers to help them present enhanced equity release to clients, including a sales aid demonstrating the impact on LTVs. This shows that a standard LTV for a healthy client of £61,200 on a house valued at £170,000 rises to £76,670* for a client categorised as obese with high blood pressure and diabetes – an increase of 25%.
More 2 life’s enhanced plan is available to clients aged 65 and over. It also offers an Interest Choice plan, for those clients considering refinancing an existing Interest Only mortgage, and a Protected Plan designed to help preserve an inheritance for a client’s beneficiaries.
