New lenders trigger surge in equity release product choice

The analysis by Key Partnerships shows that new plans available include improved loan-to-value offers for customers with lifestyle or health conditions as well as plans enabling customers to pay interest on loans, either regularly or ad hoc.

Rates now range from as much as 7.27% to as low as 2.96%.

The expansion of choice has also driven different approaches to early redemption charges for customers repaying loans early or moving house, with 12 early repayment charge structures now available.

However Key has raised concerns about the "lack of robust sourcing tools", which is highlighting increasing complexity for advisers working in the market.

Will Hale, director at Key Partnerships, said: “Increasing competition and choice in the equity release market is a welcome development as continuing demand demonstrates how important property wealth is to meeting customers’ retirement needs.

“The launch of new lenders such as OneFamily and Legal & General expands the choice on offer and increases the need for specialist advice to ensure clients achieve the best possible outcomes.

“Advisers who do not regularly work in the equity release market will struggle to keep up to date with the pace of change. Working with a specialist referral service removes all the regulatory and compliance worries while enabling them to maintain a valuable client relationship.”