The guidance has been developed in collaboration with the Green Finance Institute
The Equity Release Council has issued new guidance for member firms on launching retrofit lifetime mortgages, aiming to foster innovation and good practice in the sector.
Developed in collaboration with the Green Finance Institute (GFI) and council members, the retrofit lifetime mortgage guidance is intended to support product development and stimulate industry-wide discussions as providers respond to evolving customer demands.
The council’s guidance comes amid rising interest in energy-efficient homes and the UK’s ambitious net zero targets. It highlights the potential for growth in the equity release market by offering tailored retrofit lifetime mortgage products, which could attract a new demographic of customers who may not have previously considered equity release, enabling advisers to reach a broader audience and encouraging lenders to create offerings with distinctive selling points.
In addition to outlining good practices and ensuring customer protection, the new guidance provides advice for brokers and lenders on designing products that deliver meaningful carbon emission reductions.
The guidance introduces a model customer journey for retrofit lifetime mortgages, differing from the traditional process by incorporating an initial retrofit assessment and the involvement of a retrofit coordinator. These steps are designed to ensure that green property improvements meet high standards and achieve the intended carbon reductions.
Equity release lenders are encouraged to review the guidance and incorporate it into their product development processes or ongoing discussions about retrofit products to meet current and future customer needs.
“As the representative trade body for the equity release market, we want to champion its potential and ensure that it continues to meet the needs of as many customers as possible,” said Kelly Melville-Kelly (pictured left), head of risk, policy and compliance at the Equity Release Council. “We hope that the guidance we’ve outlined can help to accelerate efforts to innovate in the later life mortgage market and deliver a decarbonised housing market which future generations will benefit from.”
Rachael Hunnisett (pictured right), associate director for built environment at the Green Finance Institute, lauded the council for its role in setting high standards and aligning the retrofit guidance with the GFI’s green home finance principles.
“By working together, we ensure consistency across the market and a focus on driving private capital towards solving the UK’s £250 billion funding gap for improving the energy efficiency of homes,” she said.
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