Advisers are reporting an upturn in equity release enquiries during the last three months, according to research from Hodge Equity Release.
Furthermore, large numbers of IFAs believe their equity release business levels will improve in the coming months despite the effects of falling house prices.
However, redemption penalties and a negative image of equity release products were seen as major barriers within the sector.
Hodge’s IFA confidence report found 75% of advisers have seen an increase in equity release enquiries in the past three months.
Furthermore, around 70% of advisers believe they will see at least a 5% increase in equity release business in the months ahead.
However, advisers were unsure of the impact the credit crunch would have on equity release business levels, with opinion split over whether it would be beneficial or have a negative effect.
When asked which key issues affect their clients’ choice to take on a product, 100% of the advisers surveyed said early redemption charges were a major concern. Interest rates and product fees were the second largest area of concern, with 95% of IFAs identifying these as major barriers to entry.
Jon King, managing director of Hodge, comments: “It is also good to see the importance IFAs direct towards redemption penalties when advising clients. This is an area which will become even more important as people desire greater flexibility in their equity release plans if and when their circumstances change.
“As IFAs look towards a positive future for the market and as more consumers consider equity release as a potential money-releasing option, it will be interesting to track the confidence of those operating in the market going forward.”
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