Mortgage sector 'must work together to ensure older borrowers know their options'
The mortgage sector must collectively step up to ensure that over 55s are aware of the options available to them for enjoying a better quality of senior living, according to Adrian Brewer (pictured), head of later life lending at broker firm Access Financial Services.
Brewer acknowledges that there is a dearth of knowledge among older homeowners and a need for greater education of the market. He has been brought in by Access to head up its later life division because the firm recognises the sector’s potential growth. He is actively recruiting more brokers to specialise in the market.
“Ignorance is dangerous, knowledge is power,” Brewer told Mortgage Introducer. “You don't have to sit in front of a one-bar, electric fire, because you can't afford the bills. In my view, it’s dreadful. These clients have worked all their life, they've got equity in their home and they don't understand it.
“If you don't know the products are there and no one's told you that they're there, whose job is it to put them in front of you? We've all got to play a part in that. I think accountants play a part in it, I think solicitors play a part in it. Whoever's customer facing has got a responsibility because if they come in to you for advice, it's your job to explain it - it's a joint responsibility.”
He continued: “If you're a customer, you need to be able to go to get decent help with an equity release-approved individual who is not going to rip you off and charge you God knows what. These conversations are so exciting to have because you're helping people. So if a broker wants to be a good broker, they need to look after their customers for their entire journey.”
Brewer believes that the low public awareness of later life lending options owes much to an historically bad reputation for equity release prior to regulation, and a societal attitude to borrowing in retirement, along with the pride of some older borrowers. “It's an education piece, isn't it?” he said. “We saw in the recent pandemic how difficult it is to educate seemingly intelligent individuals about how not to spread disease and look after each other. So to try and explain this to somebody who has managed to navigate the nuances of life, to get to the age of 70 and pay off their mortgage and own a house… there is a mental barrier, perhaps, of them worrying about failing to provide a legacy for their children. They worry about the interest roll up. You get a lot of ‘we've spent 25 years paying this mortgage, we don't want another one’. They don't want to admit that they can't afford things.”
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How are lenders responding to the needs of later life borrowers?
Brewer praises lenders for working hard to evolve the later life lending proposition. “The lenders are amazing - they are working really, really hard and are doing a good job,” he commented. “The market's changing rapidly, the prospects are endless and I'm very excited about it. It's growing massively and I think that that is because the products are changing. There’s not just a one-product-fits-all, there are lots of options. What I would encourage brokers to do is learn about them and see how they fit with their clients.”
Access currently has around 250 self-employed advisers on its books and Brewer aims to recruit a dedicated core of around 15 later life lending specialists. “A later life adviser is a special breed of person,” he said. “What we ask of these advisers is not just your standard, straightforward mortgage adviser. I think it's a much harder job because you have got the issues of potential client vulnerability.”
Brewer, who joined Access Financial Services last autumn, is seeking CeRER qualified brokers with CAS status – the qualifications for advising on later-life lending solutions - to become part of its team. The brokerage has been operating since 2017, headed up by CEO Karl Wilkinson, who was recently named one of Mortgage Introducer’s Global 100 mortgage leaders.
