The number of equity release introducers lifted by 1% over the last year as the market remained “robust in the face of economic uncertainty”, says a report from Key Partnerships.  

The main source of referrals remains mortgage brokers who make up 64% of all introducers, followed by independent financial advisers who account for 11% and wealth managers who contribute 9%, says ‘Introducing the Introducers’ from the Key Group’s equity release referral service.  

It adds that legal firms are increasingly referring this type of customer to specialists, making up 6% of introductions this year, compared with just 1% in 2021.    

However, a spokesperson for Key Partnerships was unable to estimate how many equity release introducers there are in the UK.  

The report points out that referral customers release more property wealth, freeing up £133,048, compared to the wider market, on £114,354.  

Customers referred by accountants released the most, on £183,334, compared with customers referred by wealth managers, on £161,313, and those referred by independent financial advisers, on £117,414. Clients referred by lawyers released an average of £166,987.  

The study says that 39% of introducers say the benefit of setting up a referral relationship for equity release is that it allows them to help clients with issues they were unable to help them with previously, while 36% say it enables them to offer a wider range of services.  

Introducers say client demand is also a significant driver for referrals, with 30%, pointing out it was interest from customers that convinced them to set up a referral relationship.   

The survey adds that 21% of introducers say they preferred to refer as equity release requires specialist knowledge, while 22% claim their head office or network prefers equity release cases to be referred.  

It adds that 41% of these financial professionals expect the equity release side of their business to expand over the next one to three years, and 57% anticipate this will happen over the next three to five years.   

The report comes after chancellor Jeremy Hunt calmed international debt markets in October, by largely reversing former chancellor Kwasi Kwarteng’s tax-cutting mini-budget on 23 September, which saw the number of products on the market fall sharply while remaining loan prices jumped. Hunt went on to consolidate his measures in the Autumn Statement last month.         

Also, on 3 November, the Bank of England increased the base rate by 75bps to 3%, the biggest since 1989 and the eighth time in a row it has lifted rates. Last year in November the base rate was 0.1%.    

Key Partnerships business development director Jason Ruse says: “While the referral market mirrors the equity release market to a certain extent, the forces impacting referral partners also have a knock-on impact.   

“Indeed, while mortgage brokers remain our largest introducer group, the stamp duty holiday in 2021 and the recent market upheaval have seen them very focused on ‘business as usual’ rather than exploring partnership opportunities.  

“As we move out of a pandemic while managing these challenges, the equity release referral market has remained robust and we’ve seen modest annual growth in the number of organisations choosing to refer and a 13% growth in referrals in 2022.   

“However, we do anticipate that as the implications of Consumer Duty become clearer and organisations which are impacted understand the requirements, we will see significantly more interest.  

“Informal hand offs will no longer be appropriate in a world that is focused on good customer outcomes and organisations will need to clearly show how they are supporting their clients.   

“Against the backdrop of the current economic uncertainty when more customers are looking to housing equity for support, it is perhaps unsurprising that our introducers anticipate that they anticipate that this area of their business will grow over the next few years.”  

Key Partnerships says its report was drawn from more than 850 introducers who have provided feedback to sets of questions since 2019, while over 9,000 of the firm’s records were reviewed to identify introducer subsets.