Equilaw Ltd
Claire is the managing partner of Equilaw Ltd and Chair of the Equity Release Solicitors Alliance. She took a traditional path into law, working in a residential property team in a mid-size corporate firm. This is where, 13 years ago, she started working with one of her current business partners. She set up the equity release arm of their business in 2001. In 2007 this was rebranded to Equilaw and in 2008 it became a Limited Liability Partnership.
The two of them then decided to break off on their own. They met their third business partner and bought out the residential property arm of their old business and the entirety of Equilaw in May 2010.
Between the three of them they now own Thomas Law Group and Equilaw.
Claire set up the Equity Release Solicitors Alliance back in 2008, in order to help consumers, IFAs and product providers who were looking for law firms who were specialists in Equity Release. The Alliance was launched formally at the Law Society in January 2009.
How would you explain equity release?
It’s a mechanism that allows people to utilise the wealth that they have tied up in their homes. They might be cash poor but asset rich. They could have paid off their mortgage, or have a very small mortgage remaining. Essentially their wealth is tied up in bricks and mortar.
What they can do is get a loan against the house, which is usually secured as a lifetime mortgage (I won’t go into home reversion plans, as these only account for 2% of the market currently). A lifetime mortgage means the client can take money out as a lump sum. They might choose to retain a draw down facility as well, on which they don’t pay interest. No repayments are required during the life of the loan and the client can basically stay in their home for as long as they want to or need to.
All of the lenders belonging to the Equity Release Council have agreed that if the loan exceeds the value of the house when the last person is no longer living there, then they won’t seek to recover any shortfall. So it’s a no negative equity guarantee.
It’s a win win situation for the client. They don’t make repayments (or pay ground rent on a home reversion scheme), they get a chunk of cash that they can use as they want and they can stay in their house. Innovation is coming into the sector and some providers have introduced products where homeowners can pay the interest if they want to.
So do you see the shape of your business changing?
We are excited about the future. We have been in this business for a long time and it’s really positive to see the market growing again. Like everybody else, we had to make redundancies in 2008 so it’s great to be recruiting again, as well as expanding into new premises.
Do you see any big changes on the horizon?
I think the Equity Release Council is going to continue to grow. Membership has already bypassed 250. Standards should be enhanced. We’ve waiting to see whether new providers will enter the market, or whether mainstream lenders will either enter or re-enter the market. Technology will play a huge part of the future. We’re in the age where clients are moving to email; I can see a point where we start having Skype appointments etc. The future looks bright for those who are serious about this market!
