24 January 2022

The rise of the asset-affluent

The UK is famously a nation of proud homeowners. Buying, renovating, redecorating and selling property might as well be a national pastime. Still, there’s one element of homeownership which we seem uniquely squeamish about discussing: using a home in retirement planning.

Unlocking property wealth for clients

Later life products such as lifetime mortgages, allow homeowners over 55 to unlock some of the equity tied up in their home. Many people may have formerly seen this as a product of last resort for those who need money, as opposed to those who want to maximise their management of it.

However, accelerating house prices offer an opportunity for people to review how they look at their homes, think differently about property wealth, and consider how a later life mortgage could benefit them.

The rise in property millionaires

Data shows us that the number of wards in England & Wales with an average house price of more than £1 million has increased by 95% in just five years1. There is an emerging group of ‘asset-affluent’ people, who might not have extravagant incomes or lifestyles but, by virtue of the rising value of property, are now effectively millionaires.

This growth in house prices has come at a time when the societal need for more effective solutions at retirement is also on the rise. With the value of a home as significant as it has become, in many cases, it should be considered an investment that can be used to build a better future for a client and their loved ones.

Responding to changing client needs

From our own insight, we know that many people use later life mortgages for intergenerational gifting, estate planning, or simply to maximise their own retirement income.

We’ve recognised the need for a product range that reflects the unique requirements of affluent clients, which is why we’ve launched a Premier Lifetime Mortgage range and two higher LTV products. The new offering will provide specially designed products and additional support to advisers when dealing with higher-level loans.

A lifetime mortgage is a loan secured on your client’s home. 

New opportunities in a growing market

As an industry, by not recommending equity release, advisers are missing out on an opportunity to grow their own business. More crucially, stepping into this market could guide clients towards a solution which could quite literally change their fortunes in retirement.

If you’d like to find out more about how property wealth could help your clients reach their financial goals in retirement, reach out to one of our in-house experts.

1Based on years 2015-2020 ONS data