Knight Frank has become the first estate agent to offer later life lending advice, offered through its Knight Frank Finance arm to those over 55.
The branch will provide borrowers with guidance on a suite of products, including equity release and retirement interest-only mortgages (RIO).
Currently, those over the age of 55 hold a majority of all property wealth in the UK, at around 75 per cent, and equity release has become an increasingly popular way for them to access this.
Knight Frank Finance head David Forsdyke said: “We are seeing older people look to release equity from their primary residence for a number of reasons, including helping children financially, making home improvements and enhancing their quality of living, or to take the holiday of a lifetime. At the same time, we have seen a steady decline in pensions and savings, with retired people in the UK often finding themselves asset rich, but cash poor.
“The ‘bank of Mum and Dad’ or ‘bank of Grandma and Grandad’ has played a major part in fuelling the growth in equity release, as parents look to gift their children and grandchildren a sum of money to help them buy their first home.”
According to data published by the Equity Release Council in April, the was an 8 per cent increase in the amount of equity released in the first quarter of 2019, rising to £936m.
Furthermore, Knight Frank’s research found that the number of people aged over 65 living in the UK is forecast to increase by 20 per cent to 12 million by 2027.
Equity release referral company Key Partnerships head Jason Ruse commented: “Knight Frank estate agents offering later life lending advice is a positive development for the equity release market. Not only does this provide additional customers with access to these products but it highlights to other estate agents the potential in the market.
“We’ve seen a 285% increase in the number of introducers signing up to offer their clients access to these products between 2016 – 2018 so while not all estate agents will be in a position to copy Knight Frank’s model, they can certainly help their customers.”
In its recent report, Introducing the Introducers, Key Partnerships revealed that 3 per cent of its referrals come from estate agents. However, they noted that this percentage is likely to grow in the future and “hopes that Knight Frank’s announcement helps to stimulate interest”.
“As part of our recent brand refresh, we are working to further educate estate agents to the opportunities in the market as equity release can not only be used to help the younger generation with much needed first time buyer deposits but it can also be used by existing home owners to help with their next house purchase,” Ruse concluded.
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