Members of the equity release providers trade body reported that HSBC, Barclays, Nationwide, Lloyds TSB, Royal Bank of Scotland and Halifax are predicted to begin offering equity release products in the future. SHIP represents 18 providers and over 95 per cent of the sector by volume.
SHIP has released the results of its first SHIP Member Survey, which indicates equity release consumers will benefit from increased provider competition. Most SHIP members predict the equity release sector will become more competitive from the first quarter of 2006. All of those surveyed also believed equity release interest rates would either stay the same or decrease in 2006, meaning consumers will benefit from cheaper deals as providers compete with each other to attract new business.
Jon King, chairman of SHIP, said 2005 was a very positive year for the equity release industry with low interest rates, growing consumer demand and new providers entering the market all helping bring equity release into the financial mainstream. “The SHIP Member Survey shows 2006 is likely to be even better for consumers with greater flexibility, lower costs and continued product innovation,” he added. “With home reversions coming under FSA regulation as well as lifetime mortgages helping to bolster confidence in the sector, the future looks bright for equity release.”
Dean Mirfin, business development director at Key Retirement Solutions, said: “Prudential has already slashed its headline rate for its lifetime mortgage in 2006 which is good news for consumers. It’s a matter of time before other providers enter the market. Innovation and competition has to be a good thing but I urge providers to keep the products simple as it’s vital advisers and consumers fully understand the products.”
