Equity Release Heading Towards a Record 2016
Rapid growth in the equity release market has been predicted by Lloyds Bank’s Managing Director Mike Jones, who told the FTAdviser mortgage lenders are adapting to the dramatic upheaval in borrowers’ circumstances.
A number of issues, but primarily post-recession financial difficulties, Brexit concerns, and longer lifespans have led to an influx in equity release borrowers.
It’s believed the UK population, over the next decade, will likely rise by 51% as medical advances and improved healthcare improve peoples’ lives. As people live for longer, there’s a possibility retirement funds may not be enough – consequently, equity release is consistently proving to be something of a lifeline for many over 55s. Such concerns and economic shifts are leading to a record breaking 2016.
Falling Equity Release Rates
The good news for those turning to releasing equity is that rates continue to fall. This has been an ongoing trend each quarter throughout 2016. It was reported in the Telegraph in early September that because equity release rates are continuing to fall, this is making it more affordable for over 55 homeowners.
Talking to an expert when it comes to choosing your scheme is important during this process, which is where we can help you make the right choice.
For instance, by choosing a lifetime mortgage you wouldn’t pay any insurance until after your die. Interest is accumulated and paid out of your estate after your house is eventually sold, which ensures you receive a fair deal in retirement.
The flexibility of equity release schemes has also ensured homeowners are now releasing record amounts of cash from their property. Over £500 million was released in April, May, and June 2016, which signals the industry is set for a record year in 2016.
Unprecedented Interest in Releasing Equity
As has been noted by the Equity Release Council and industry figures, the surge in popularity for the scheme is unprecedented. Homeowners are able to take large cash lump sums which are locked in their homes.
Furthering the possibility for a prosperous future are younger generations, many of whom are now concerned about post-recession society cashflow. Many are now expecting to still be paying mortgages into their 70s, which means equity release could provide a welcome boost once they’ve reached their mid-50s.
Whilst it’s always important to speak with an FCA registered financial adviser before making any decisions, you can search the market for free with our online tool and make an informed decision about your retirement.
By releasing equity, you could receive a large cash lump sum which can be spent on anything you want! Popular choices include on the holiday of a lifetime, for home improvements, university fees, or an early inheritance gift to family members.