Johnson explained that the biggest drop in activity has been among “aspirational-based” activity - people who are releasing equity to pay for extensions, new cars or holidays - but she said this is starting to return too.
Nowadays though, 80 to 90 per cent of 55Plus’ business has been based on parents releasing equity to gift their adult children.
“It is absolutely huge and there’s various reasons for that,” Johnson said.
One common reason she said, is gifting to support adult children with mortgages, particularly adult children who have split from their partner and are now looking to get a property of their own.
“It kind of started since lockdown because that caused a lot of disruption in family life - marital splits, things like that. So it has definitely grown since then, before Covid it was for the holidays and cars and it’s completely changed,” Johnson said.
“We can offer so many solutions for people’s problems within the lifetime mortgage range
“All of my advisers have got that same philosophy as me that it’s all about the service and doing a good job and if it’s not right for the client, we will tell them,” Johnson added.
Future outlook
For now, 55Plus has paused its expansion plans and has no interest in moving into other product markets any time soon.
“We are highly specialist, so we haven’t got any plans yet but I don’t know what can happen in the future,” Johnson said.
However, the firm is eyeing up potential acquisitions with plans to consolidate similar businesses over the next three to five years.
Looking ahead to the near future, Johnson expects equity release to only grow in popularity.
“I was talking to a couple of lenders recently and they say there hasn’t been that great a dip. Applications are still coming through. I think a lot of them are people doing further advances and drawdowns who have already got lifetime mortgages and they are familiar with it and need to raise more money.
“We need to get the message out that equity release is an option and take away the myth that it is bad.
“All the scare stories, the scare mongering, none of it is true anymore, it is very different. Once you get people who just open up and want to listen to the facts it can be a game changer.”
