Bridgewater Equity Release: advisors cautious about rent-back

New figures from Bridgewater Equity Release suggest equity release advisors are reluctant to recommend the sale-and-rent-back market to clients. The market offers homeowners the option of selling their properties at discounted rates in exchange for tenancy arrangements.

Bridgewater’s survey, based on figures from Northumbria University, showed that only 16% of advisors had a client who had entered into a rent-back plan, despite the fact 34% said they had seen clients over the last 12 months for whom rent-back would have been applicable.

However, the sector is to become fully regulated on June 30 and it seems this will have an impact on advisors’ willingness to recommend rent-back. The survey found 24% are ’likely’ or ’very likely’ to advise on rent-back under full regulation. A further 38% said they would be likely to offer advice on the sector if a well-known financial services provider entered the market first.

Peter Welch, head of sales and distribution at Bridgewater, said: “It would…seem that many more advisers would consider entering or continuing in the sector if a more widely-known provider was active in the marketplace but this is only likely to happen if the market size is attractive and distribution, as always, is key. 

“The current providers have work to do to gain advisors’ trust and it will be interesting to see how the full regulatory regime impacts going forward.”