Over half of all equity release referrals now come from mortgage intermediaries, according to new industry data. 

Figures from Key Partnerships shows that while there was a 1 per cent year-on-year fall in the number of new introducers, this has been on the back of very strong growth in recent years. 

Key Partnerships, which produced this report, said the market remained robust, despite the Covid-19 pandemic as mortgage brokers were continuing to diversify their product range.

Key’s data showed that between 2017/18 and 2019/20 there was a 47 per cent increase in the number of introducers entering the market. This slowed as the impact of the pandemic hit, with 1 per cent fewer introducers signing up on a monthly basis in 2020 compared to 2019.

Mortgage brokers (56 per cent) were the main driving force behind the introducer market as they sought to complement their standard and later life mortgage offering by adding equity release as an option for clients.   

The data there was a sharp decline in the number of new IFA’s referring clients. This fell from 25 per cent of all referrals in in 2019 to just 13 per cent in 2020, as many IFAs focused on their core businesses during the pandemic. However Key found there was an modest uptick in the number of wealth managers referring on clients, potentially to mitigate inheritance tax issues.

It said some introducers may be referring cases, rather than transacting themselves because of staffing issues due to the pandemic. 

This report shows referrals are driven by the specialist nature of this product and client needs. One in four introducers (26 per cent) said they had referred on a case, rather than transacted it themselves because their network or head office prefers them to refer to a specialist. A further 24 per cent said they viewed this as a specialist product themselves. 

Key Partnerships director Jason Ruse says: “While it is almost impossible to talk about the later life lending market in 2020 without referencing the pandemic, it is good to see that the referral market has been remarkably robust.  

“Mortgage brokers remain the most common referral partner as they look to add equity release to the range of later life lending options they can provide.

“It is interesting to note that half of introducers felt that they or the networks they work for viewed equity release as a specialist product requiring specialist advice from a highly qualified expert.”