Analysis of more 2 life cases suggest that there are some signs that advisers should look out for when speaking to potential clients as it may make it harder to place the case or result in it being declined all together. As products which are designed to be held over the long-term, the lending criteria around equity release plans are based on ensuring that the asset will increase in value and any issues which might impact on the value or saleability are avoided.
To help advisers manage client expectations, more 2 life has identified the following potential barriers to an equity release application being successful, including physical aspects such as construction methods (single skin construction, for example, may prove trickier), flat roofs, asbestos and certain types of foam insulation in the roof.
There are also certain location issues to keep an eye out for - such as commercial properties close by, flood risks, or electrical infrastructure like pylons and substations in the vicinity.
Dave Harris, CEO at more 2 life:
“With increasing numbers of people aware of the benefits of equity release, we know that being declined by a lender can be devastating for the client and a real disappointment for the adviser who has worked to help them.
“We don’t expect advisers to be able to tell if a property is on a flood plain or not but if the client mentions that they have been flooded in the past, this should sound alarm bells and they will be aware that the case might be more difficult to place.
“Every funder has slightly different criteria and as more 2 life work with a variety of different organisations, we are in the fortunate position that we can help the vast majority of our customers but we believe it is important to educate advisers so they can start to manage their clients’ expectations.”
