Under normal circumstances, customers taking out equity release must receive legal advice face-to-face in order to comply with standards set out by the Equity Release Council (ERC).
However, while the UK’s lockdown measures are in place, this rule is being lifted. The ERC said legal advice will be able to take place ‘remotely’ without a physical face-to-face meeting.
Customers will receive the advice either in written form, through documented videos or telephone calls.
What’s more the compulsory physical witnessing of a client’s signature on the mortgage deed will be carried out by an independent adult witness of the client’s choosing who will also be subject to identity checks and due diligence.
The witness will attend in person, the ERC confirmed, but they will be reminded to observe social distancing and hygiene protocols. The customer will need to return the deed by post or courier.
Valuations
Lender more2life announced it was switching to ‘semi-automated’ valuation so surveyors would not need to visit the homes of potentially vulnerable clients.
It is thought lenders will be more cautious using this approach and there are likely to be some restrictions around high loan-to-values or where non-standard building materials are involved.
Meanwhile Legal & General, another equity release provider, said it had stopped physical valuations, and would now be offering desktop valuations for its lifetime mortgages.
These will be done by an independent valuer, using publicly available information to assess the value of clients’ homes.
Adviser, Equity Release Supermarket, also announced it was launching an online video chat service to make themselves more available to customers whilst social distancing was underway.
Video calling apps
Stuart Wilson, B2B marketing director at more2life, said the industry was looking at using video calling facilities such as Skype to support its customers.
“The later life lending market and the wider UK property market are facing an unprecedented challenge in the form of the coronavirus pandemic,” he said.
“While most sales and purchases have stalled to allow for the need for social distancing, equity release is a slightly different story. Indeed, the main sticking points have been the need for face-to-face independent legal advice and the need to undertake ‘physical’ valuations.”
“Remote options such as Skype, Zoom and Facetime which allow interaction without the need for someone to physically meet are being suggested.
“These measures are designed to maintain high standards of protection while helping to keeping the process moving and allowing customers to receive their money. Once ‘lockdown’ has been reversed, the process will revert to normal.”
