Growing numbers of older homeowners across the South are turning to equity release to solve their cash problems, report Coles Miller Solicitors.
Coles Miller Partner Anthony Weber said: “Some retired people on relatively fixed incomes are running short of capital.
“They are increasingly exploring the option of equity release.
“They don’t want to compromise on their standard of living or sell their family home to downsize,” added Mr Weber, who is based at Coles Miller’s Broadstone office.
Equity release is like a conventional mortgage in that homeowners borrow money against the value of their property.
But unlike a conventional mortgage, they don’t usually need to make any monthly repayments (unless they move out and go into a care home).
Borrowers can spend the loan as they choose, usually to top up their pension.
Some take out an equity release loan to repay an interest only mortgage or to help their children or grandchildren get a foot on the housing ladder.
Most borrowers are aged 65-74 but they can be even older. Conversely, some are as young as 55.
The loan plus interest is then usually repaid after the borrowers have died – most often through an executor sale of the property.
The borrowers are not obliged to sell their home while they are still alive, as long as:
- one or both borrowers are able to live in it
- they are maintaining and insuring the property
- they are complying with the conditions and regulations, as per a conventional mortgage.
Latest data from Equity Release Council shows that demand nationally is growing at a record rate.
Lending for the first six months 2016 was £908 million – 28 per cent up on the same period last year.
The Equity Release Council is the industry body for the equity release sector. It represents more than 400 members including providers, qualified financial advisers, solicitors, surveyors and other professionals.
Coles Miller has offices in Poole, Bournemouth, Christchurch, Broadstone and Wimborne.
Its solicitors offer a free 30-minute preliminary consultation to any clients wanting more information about equity release or other options.
Anthony Weber is one of four Coles Miller lawyers accredited to Solicitors for the Elderly. They specialise in dealing with later life legal matters such as wills, probate and powers of attorney.
For more information about equity release, please contact Coles Miller Partner Anthony Weber, 01202 355698.