The changes in equity release perception
Published: 12 May 2021 | Author: Advise Wise | Reading time: 2 minutes
Equity release has been subject to a negative connotation in the past and it hasn’t always been a popular solution for customers. A few years ago, the idea of raising funds against their home could make people pretty uncomfortable, as it was in contrast with the most common mindset to repay the mortgage as soons as possible.
Following a period of significant social, cultural and economic changes, the scenario is very different. During the last few years, we’ve been witness to a global pandemic and multiple changes in the equity release sector, from a dramatic drop of interest rates, to a high street building society entering the market and the stamp duty holiday. And equity release is now considered a valid tool to release funds for later life customers.
Many advisers and wealth managers have identified what equity release offers with scope and capability, so that it is now very much a financial planning tool to be considered alongside pension and investments.
To some people, it might seem strange to borrow money if you have got money, but the peculiarity of equity release is the make up of how money is released and stored, taking into account any tax advantages. Equity release is not just the unlocking of money required from the home and it’s not even a sale, but it’s certainly one of the financial solutions available in later life.
The numerous additional features that have been added to the products over the years have helped overcome the obstacles of equity release, such as moving, paying interest, optional payments and possibly downsizing and many more. This includes the repayment option, with a large number of lenders now offering fixed early repayment charges.
So equity release gives great flexibility, with borrowing based on the applicant’s age and property value, and comes with the Equity Release Council guarantees, to protect the client.
This is a good time to reach out to clients of all ages (younger lends can refer to their parents) but more importantly your professional connections, especially divorce lawyers and estate agents, explaining equity release’s scope and capacity to create a more comfortable world for them and their families. Equity Release is financial planning that can provide for today, but also cover tomorrow, taking account of any changes along the way.
