• Maxim Cohen

Equity Releases: The New Normality

It would be fair to say that equity releases are becoming a common option across the UK and many more people are aware of this solution and how it can be of benefit to you and your loved ones. With industry figures suggesting that there has been a 44% rise on year-on-year lending figures, with the value of equity release over a three month period reaching £824m, people are becoming increasingly comfortable with this financial option.

Further proof that this is an option that is reaching the mainstream comes with Nationwide announcing they are looking to engage this market. This will see Nationwide become the first mainstream mortgage lender offer equity release options [1]since the 2008 financial crash when banks decided to withdraw this option. In recent times, this option has been provided by specialist lenders but with equity release options heading to the High Street once again, it is fair to say that more people are going to consider this style of option.


A lifetime mortgage provides you with freedom

With an equity release sometimes being referred to as a “lifetime mortgage”, it is important that people understand why they should want to consider this option. Having the chance to extract value from your home is something of interest for many homeowners, particularly people enjoying their golden years. There is a great deal to be said for having this additional source of income and many find an equity release to be an attractive option because it is usually only repaid when the property is sold off or when a customer passes away.

As you would expect, there is a wide range of opinions on the suitability of equity releases. While some people argue that this will see a fall in the traditional style of inheritance being offered to loved ones, it could lead to a rise in “living inheritances”. This is when a relative is able to provide loved ones with a gift or backing when they are still alive. For many people, this is a more attractive option as they will be able to see the benefit their gift provides to the people they care about.



This is a chance to support loved ones

There may also be practical reasons for providing this level of support to people at this stage in life and it is likely that the impact of a gift after an equity release could see people get on to the property ladder.

A study undertaken by Nationwide suggests that one in ten people[2] are looking to obtain this style of assistance to provide help to family members or friends. However, there is no denying that a very common reason is the desire to pay off an existing mortgage and this is something that will provide people with a greater level of disposable income in their retirement.

If you haven’t heard too much about equity releases and the benefits they offer, you can expect this to change in the near future. If you would like to talk about the benefits of equity release or find out if it an option you can consider, please get in touch and we will be more than happy to offer guidance or advice.

[1] https://www.nationwide.co.uk/about/media-centre-and-specialist-areas/media-centre/press-releases/archive/2017/11/17-lifetime-mortgage


[2] http://www.telegraph.co.uk/news/2017/11/17/boom-older-people-using-home-cash-machine/

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