A staggering £384.3m was lent out by equity release providers in the second quarter of this year – that’s the largest of any quarter since 2002. The figures, released by the Equity Release Council, show that homeowners aged 55 and over withdrew on average £4.2m of housing wealth every day from April to June! But why the sudden increase? We think a lot of it has to do with these highly publicised changes over the last year…
- Pension Reforms
It’s true the pension reforms have given retirees more choices about their savings, but what it’s also done is raise vital awareness about the issue of funding our own retirement when the time comes. With so much media attention highlighting the financial pressures facing retirees today, coupled with the cost of living in retirement, it’s no wonder thousands more are using the value of their homes to top up their wealth.
- A solution to the mortgage crisis
The Mortgage Market Review has prevented many people – but especially older people – from accessing a traditional mortgage. Many are also now coming to the end of their interest-only mortgage term without a full repayment plan, in both instances leaving equity release as a viable solution for borrowing in later life.
- House prices on the up
With property prices increasing, so do the loan-to-values that homeowners can access. It’s great news for new and existing customers and almost certainly a reason that more people are cashing in on their homes. With interest rates still remaining consistently low for the time being and homeowners being able to access a bigger proportion of the cash from their homes, equity release appears to be more attractive than ever to those factoring in their property in their later life planning.
As equity release isn’t right for everyone, your independent Bower specialist will explain all the benefits and disadvantages of a plan, including how it may affect your entitlement to some state benefits and reduce the value of your estate. To find out if equity release could be a good financial option for you, contact our friendly team to arrange a free, no-obligation consultation. Call 0800 411 8668 today.
This is a lifetime mortgage or home reversion plan. To understand the features and risks, please ask for a personalised illustration.
If you are considering equity release we strongly recommend that you read our ‘Advantages and Disadvantages of Equity Release’ page carefully.