AGEING POPULATION Burden or Benefit ERMS A new market or a sideline product

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AGEING POPULATION- Burden or Benefit?ERMS- A
new market or a sideline product?

• Desmond Le Grys

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Equity Release Mechanisms

• Scope
• House Equity owned by people over 65 400 billion
• Amount of Equity Release to date 2 billion

3
Equity Release Mechanisms

• Products
• Cash release - mortgage or reversion
• Repayment on death (surviving spouse)
• Cash - can be banked/spent
• - use for income
• - other products
• Wide range of products

4
Equity Release Mechanisms

• Customer Concerns
• Low Customer Confidence
• Last Resort
• Inheritance
• Distress Purchase?
• Sudden Shortfall

5
Equity Release Mechanisms

• Market Sectors
• Category A Good Income
• Valuable House
• Category B Low Incomes (above M.I.G.)
• Modest Houses
• Category C Low Incomes (below M.I.G.)
• Small Modest Houses

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Equity Release Mechanisms

• Changes in Public Attitudes
• Category A
• Better Constructed Policies
• Realistic Planning
• Inheritance
• Familiarity with Products
• Category B
• Slow Change

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Equity Release Mechanisms

• Government Attitudes
• Category C
• Repairs and Improvements
• Local Authority Commercial Lenders
• Private Sector Housing Renewal
• Nursing Home Costs
• Designated Budgets
• New Alliances

8
Equity Release Mechanisms

• Requirements for Expansion
• Allay Peoples Fears
• Value for Money
• Better Explanations
• Good Selling Practices
• Financial Advice
• Regulation
• Pension Credit Scheme

9
Equity Release Mechanisms

• Restraints
• Institutional Investors
• Shared Appreciation Mortgages
• Government Action Required
• New Vehicles
• Guarantees

10
Equity Release Mechanisms

• Conclusion
• Demographic Trends
• Less Reluctance
• Government Encouragement
• Past Problems Over
• New Products Required
• Value for Money
• Better Distribution
• Institutional Investors