"Borrowers' motivations for using equity release have changed significantly and many are turning to equity release to help them make home improvements, cover essential costs and support loved ones."
We spoke to Martin Heppenstall, chief underwriter at more2life, about how the coronavirus crisis has impacted underwriting and his predictions for the key trends in the equity release market over the next six months.
FR: As the underwriting lead at more2life, what does your role involve and what are your day-to-day responsibilities?
As the chief underwriter at one of the UK’s biggest equity release lenders, my days can be very varied. I’ve worked for more2life for over 13 years and in that time plenty has passed my desk - everything from the technical to the bizarre. While it can be challenging, I find the variation refreshing. My role covers everything from overseeing more2life’s ongoing maintenance, monitoring and implementation to training. I also take an active role in the development of our lending policies to ensure they reflect the appetite of the business and the demands of customers. I also work closely with our suppliers and partners on the technical aspects of the underwriting process, such as advising on our legal guidance and implementing mentoring and support resources for advisers.
FR: How has the coronavirus crisis impacted the underwriting approach at more2life and what have been the key priorities for the team?
The coronavirus crisis has led us to adapt our processes extensively. The challenges we have faced since March have led to significant innovation in our approach. We have worked hard to ensure that our clients and adviser partners continue to be supported throughout the crisis. We had to adapt our lending policies and processes to reflect the risks created by the crisis.
A key example of this has been our approach to remote valuations and advice. more2life was one of the first equity release lenders to launch a remote valuation process, which meant end-customers could continue to access our products at a time of considerable change. Until the crisis, the equity release industry required many aspects of the borrowing process to happen face-to-face, however, we have successfully overcome this and have made sure that the remote advice journey offers the same level of care and guidance. The work carried out by the team has been nothing short of amazing and I’m grateful to the individuals that helped make it happen.
FR: What are the key lessons more2life has learnt from the crisis?
The crisis forced us to pull together in a real time of adversity. However, we have also learned some valuable lessons. The need to adapt and think creatively to find solutions has shone through as a key lesson. The shift to remote advice and valuations has been a significant challenge, however, it has shown us the importance of technology in helping to innovate and develop the market.
more2life has also been focused on making sure our adviser partners are fully equipped to support clients remotely. Through a range of interactive educational sessions, we have generated significant interest from the broker community, helping to guide them through this difficult period.
Naturally, teamwork has also been key during this time. Some months on from the start of the crisis, I have also learned a new appreciation for my team and myself – often it is easy to overlook your accomplishments in the heat of the moment. Looking back makes me realise how far we have come.
FR: What do you expect will be the key trends in the equity release market over the next six months?
If the crisis has taught us anything, it is to expect the unexpected. We have been through so much change since the start of the year and we’re in a very different lending market than we were before. It’s difficult to say how the market will continue to evolve but our focus continues to be on supporting our adviser partners and providing a wide range of innovative and flexible products for borrowers.
While we cannot be completely sure of how the market will evolve over the next six months, we do know that it’s unlikely to ever return to its pre-crisis conditions. Borrowers' motivations for using equity release have changed significantly and many are turning to equity release to help them make home improvements, cover essential costs and support loved ones.
However, we are already seeing confidence return to the market and lending predictions suggest that we may have a similar story to 2019, where Brexit uncertainty impacted the first half of the year but there was a strong recovery in the final six months. For now, we are focused on how we can continue to optimise our work to help us grow. We were also well prepared for the second national lockdown with our automated valuation tools. Having relied on it so heavily since the start of the crisis, we would also like to see the industry embracing the influence of technology. The later life lending sector has traditionally resisted technological change, however, this crisis has taught us the positive impact it can have.
FR: How can the later life industry continue to support older borrowers during the pandemic and after?
So far, the equity release industry has worked commendably to adapt to the crisis and ensure that customers can continue to access the funds they need at this time. However, we are not out of the woods yet and with the current national lockdown, we must continue to play our part. Later life tools like equity release will continue to be an invaluable tool for many older homeowners during the crisis, providing them with solutions to common issues such as paying for care costs.
While we continue to play our part by offering customers the product choice and flexibility, advisers will have an equally important role in helping to guide people to the solutions that meet their specific needs and circumstances.
FR: If you could see one headline about financial services in 2021, what would it be?
“Demand for equity release returning to pre-Covid levels”.