To say Covid-19 has hit the UK hard is somewhat of an understatement. Notwithstanding the devastating human toll, the economy has also been badly affected. As the nation seeks ways to bolster its finances, could equity release bring hope in a time of crisis? Acumen discusses its merits and underscores the need to seek out independent financial advice.
In 2019, the equity release market was buoyant. Nothing could halt the relentless growth of the sector, or so it seemed, as lenders chalked up another record year. “Reflecting on 2019, the equity release market remained robust, as for a second year running older homeowners unlocked nearly £4bn of property wealth,” said David Burrowes, Chairman of the Equity Release Council in their 2020 Spring Market Report.
Of course, no one could have foreseen what came next.
Now, amid a climate of pandemic-induced uncertainty and a rapidly ageing population, could equity release take on greater significance? With over-55s accounting for 75% of UK population growth (a figure that is projected to increase by 3.7m by 2030), and global markets hit by the Covid-19 crisis, it’s easy to see how the relative certainty of bricks and mortar equity could become a lifeline to many.
How does equity release work?
Equity release enables homeowners aged 55 and over to extract equity from their home. This can provide a boost to retirement income and allow retirees to remain living at home independently – a major benefit in the current climate. We must stress, however, that equity release is a lifelong commitment that comes with risks. Which is why it is imperative to seek advice from an independent financial adviser to discuss your options.
The main equity release options are lifetime mortgages and home reversion.
Lifetime mortgages allow you to take out a mortgage and ringfence a proportion of your property’s value. The loan and interest are paid back when you die or move into care. Home reversion involves selling part or all of your property to a home reversion provider in exchange for a lump sum or regular payments. At the end of the plan your home is sold and the proceeds are shared between the remaining owners.
Speak to an Acumen adviser today
There is now a broader array of equity release products available than ever before, with many offering interest-serviced options, partial repayment flexibilities and downsizing protection. Acumen’s experienced Equity Release advisers are fully accredited to help you navigate the various options available through our totally independent equity release advice. Our deep understanding of the Equity Release landscape means that we can provide thorough, plain English advice that is tailored to your needs.
All of our equity release advice is personalised, evidence-based and delivered with your best interests at heart, in line with the Equity Release Council’s guidelines. “Strong consumer safeguards will continue to ensure equity release is chosen for the right reasons, with applications vetted prudently and carefully by weighing up both short- and long-term needs,” the Council’s Burrowes reassured prospective customers.
For equity release advice you can count on, make Acumen Financial Partnership your first port of call.
For more information about equity release, we’ve answered some of your most frequently asked questions about equity release. To discuss your equity release options with one of our mortgage advisers, contact Acumen today by calling 0151 520 4353 or email us at [email protected]