Key Partnerships has revealed that the number of equity release products has reached a new high with customers able to choose from 769 products on the market.

The equity release referral service arm at Key Group said this is a 21% increase since the start of 2020 and more than double the amount of plans available just two years ago in 2019 (306).

Growth in the number of plans has been accompanied by increasing innovation from lenders with more borrowers than ever able to access a host of flexible features. The number of plans on the market offering downsizing protection (+392%) increased the most over the two years followed by ad hoc fee free repayments (+278%) and interest repayments (+319%).

Key Partnerships said the latter mean that equity release products are more comparable than ever before to other later life borrowing options such as retirement interest-only mortgages and later life mortgages as they allow easier management of a client’s borrowing.

The ability to make ad hoc interest free repayments (+278%) has also increased.

Drawdown (+86%) has seen the smallest increase but this feature has been commonly available for several years now.  The number of products with fixed early repayment charges (+137%) has seen a more modest increase but with Legal & General adding this as an option in May and Just announcing they intend to do this in future, this is likely to grow, Key Partnerships said.

Jason Ruse, business development director at Key Group, said: “The growth in the equity release market has been remarkable with the number of products available doubling in just two years which provides significantly more flexibility and options for clients. The number of features has also boomed with over 300% more products offering options such as interest repayments, downsizing protection and inheritance protection.

“While this type of growth in numbers and features should be welcomed, it does highlight the need for advisers to keep a close eye on what is happening and what features each lender is able to offer. Things are changing fast at the moment and in just six months, we saw 21% more products that advisers need to consider. One of the reasons for this is that the majority of customers during the pandemic have released equity due to an immediate need, but as the UK edges closer to less restrictions we will see clients releasing equity to fulfil both retirement as well as aspirational needs

“You may be able to dabble in some markets but this is certainly not the case in the later life sector and those who haven’t transacted business for a while should consider whether setting up a referral relationship might not be a better idea. Being able to refer your client with confidence to a specialist adviser who fully understands the market is going to pay greater dividends in the long term.”