Equity Release market takes another hit from lack of funding

Voting is now taking place for the Equity Release Awards, with the winners being announced at a lunch on 13th November. With ongoing serious funding constraints for the long term end of the market having now having forced several lenders to withdraw from their lifetime mortgage range there must be a serious danger that by 13th November some of the winners will no longer be offering Lifetime mortgages.

This won’t be a reason to not offer an award to any of these companies if they win as the awards are based on achievements over the previous year. However, it will be a stark reminder that we are a long way from mortgage funding returning to normal. And this just a few days after the speech from MPC member David Miles on 30th September explaining that a key objective of Quantitative Easing (QE) was to reduce the cost of long term borrowing. He said the reduction in corporate bond spreads has “…helped to encourage increasing gross and net corporate bond issuance.”

Despite this, if the success of QE is to be measured on David’s suggested measure of reducing the cost of long term funding it has so far proved spectacularly unsuccessful as far as funding for this longest of all long term mortgage markets is concerned!