Equity Release Cases Surge

Equity release cases surge as over 55s seek solutions to rising costs

The demand for equity release has witnessed a substantial upswing, with nearly half (44%) of all equity release applications in the first quarter of this year being driven by remortgaging, according to recent data from 55Plus.

The surge in applications is attributed to the escalating mortgage rates and stern warnings from the Bank of England about potential higher monthly repayments.

This trend underscores the urgency among individuals aged over 55 to tap into the capital locked within their properties, in order to confront mounting costs without resorting to property sales.

Rudy Khaitan, managing partner of Senior Capital emphasises the changing perception of equity release as a potent financial instrument to tackle the cost-of-living quandary. He notes that equity release has evolved into a tool for asset-rich pensioners to alleviate financial strain.

Beyond augmenting their own standard of living, pensioners are leveraging their property wealth to facilitate their children’s entry into the property market, a move bolstered by the prevailing average 2-year fixed mortgage rate nearing the 7% mark.

These revelations come at a time when the elderly populace is outnumbering the younger generation, and constrained finances are causing many in the UK to defer the prospect of a comfortable retirement. With the average pension pot languishing at a mere £107,300 and reports highlighting curtailed spending on necessities such as medications and meals, equity release is emerging as a lifeline for an expanding cohort grappling with the cost-of-living predicament.

Khaitan said: “In today’s society, many over 55s find themselves in a paradoxical situation – they are ‘asset-rich’ due to the value of their homes, yet ‘cash-poor’ with limited disposable income. As the cost of living continues to rise, many find themselves struggling to make ends meet, despite owning valuable properties.”

Khaitan added: “Equity release offers a solution to this dilemma by enabling homeowners to tap into the wealth tied up in their homes. It can provide a much-needed cash injection to enhance their quality of life, cover unexpected expenses, or even help their families.

“Equity release is more than just a financial transaction; it’s a means of bridging the gap between asset wealth and living standards, ensuring that those who have worked their whole lives to build their assets can finally reap the benefits of their hard work.”

SOURCE - The intermediary.co.uk, Ryan Fowler, 21.8.23

Please do get in touch us at Cozens & Dean if you would like to know more about later life lending or anything else mentioned in this article

www.cozensanddean.com 

01354659425

kingslynn@mortgageforce.co.uk