Good news for advisors – tech prevails and business bounces back

Data released by independent equity release advisory service, Equity Release Supermarket (ERS), shows that there’s a continued desire amongst their customers to maintain a digital approach.

Digital transformation has been a necessity for many businesses over the past 18-months to enable them to function, grow and meet the demands of consumers.

Following ERS’ launch of smarter, the UK’s first equity release search engine for consumers, ERS reflects on Q3 findings, the long term effects of the pandemic, and the shifts in equity release usage.

Mark Gregory, founder and chief executive officer at ERS, comments: “We’re constantly driving digital innovations at Equity Release Supermarket.”

“So, we were already geared up to bring our customers greater choice and flexibility online, but it’s been encouraging to see people embrace online activity and interact more digitally.”

ERS generates almost 70% of our business from its website, and with the launch of smartER in September, it has generated close to 30% of ERS’ calculator-related website page views.

Now that the lockdown restrictions have come to an end, Equity Release Supermarket’s customers have returned to face-to-face advice, growing from 9% in Q1 of this year to 28% in Q3 and 20% year-to-date.

Advice over the phone dropped by expected levels from Q1 at 60% to 37% in Q3 and 46% year-to-date.

Having launched a video advice channel in March last year, the company has reported continued popularity for this type of communication even post lockdown. The combination of telephone and video advice dropped by 1% in comparison to Q1, reported at 7% in Q3 and 7% year-to-date.

Similarly to last year, Equity Release Supermarket also noted that the heart of the capital, as well as the South East were the most buoyant areas, continuing to dominate accounting for 37% of plans in Q1, 34% in Q3 and 35% year-to-date.

When it comes to regional property variances, London remains top of the charts, with the average release reported at £227,000 YTD – twice the national average of £113,000. While the North East borrow the least standing at just £56,000 year-to-date.

Gregory goes on to say: “Business has increased each quarter as we’ve moved out of lockdown, with the total amount clients release also rising in line with the general confidence in the market.”

“The need for great flexibility for spending equity has evolved over the past 18-months and we’ve seen consumer behaviour continuing to change. In fact, interestingly our clients were not borrowing more just to take advantage of the stamp duty holiday on house purchases.”

Instead, he says money released this year has been influenced by a combination of the stamp duty holiday, the desire to support children financially and a need to reduce stress on outgoings during lockdown.

According to Equity Release Supermarket, many people with maturing interest-only residential mortgages and the need to repay this mortgage, has led to younger clients now seeking equity release.

It was the case year-to-date that those aged between 60 and 64 accounted for 25% of ERS clients, with 23% aged 65-69 and 19% aged between 70 and 74. However, more clients are now aged between 55 and 59 than within the 75-79 bracket (13% vs 11%).

The types of plans taken out were also reflective in the desire to borrow a single lump sum – to repay a mortgage, make a property purchase or pay a debt for example. Throughout the year, a lump sum plan proved to be the most sought after, with Q1 of this year representing 57%, Q2 equating to 60%, Q3 equalling 58% and year-to-date coming in at 58%.

Drawdown plans come in just behind in second place. In Q1 this year they represented 35%, Q3 hit 31% and year-to-date equated to 33%. 

“As a business, Equity Release Supermarket has continued to grow in the last Quarter. As of the end of Q3 this year comparatively to last year, our revenues grew by 15% year-on-year,” Gregory adds.

“We saw particular strong growth at the end of Quarter 3 as a result of the lockdown restrictions being lifted. This is encouraging as we embark on the close of the year and also going into 2022 as our application volumes increased by 13% in September this year compared to September last year.