The Nationwide Building Society has revealed that house prices increased by 0.6% in February representing a 9.4% rise since the same month last year. The Society suggests that the strengthening property market is a result of:
- Sustained low interest rates
- Better mortgage availability
- More confidence about employment prospects
Whilst other property surveys do not indicate such a large rise in prices, it is apparent that the wealth of homeowners is now very much on the up and now close to the level reached in 2007 prior to the credit crunch.
It has been estimated that pensioners in the UK have £800bn of equity tied up in their homes. With the equity release market accounting for only £1bn a year, there is clearly ample scope for those in retirement to make use of Equity Release to improve or maintain their lifestyle after they stop working.
For those considering a Lifetime Mortgage or Home Reversion Plan, or indeed a Lifetime Interest Only Mortgage, the other good news is that loan to values are also rising reflecting the tough competition between the Equity Release Providers. During February, a high loan to value lump sum plan was relaunched (New Life Gold), and a drawdown plan was introduced by a new Provider (Pure Retirement) which offers extra cash for those aged over 70 for both now and in the future.
In order to compare the lump sum and drawdown alternatives which are available, it is best to talk to an independent specialist Equity Release adviser like Bower who have access to the more attractive interest rate options, and often special deals from the various Providers.