2017 was a bumper year for Equity Release
12 January 2018 by Susanne Grimwade
Now the festive season is well and truly behind us, thoughts now turn to the New Year, when many of us review our finances. This may include reviewing mortgage rates, switching utility suppliers and transferring costly credit card debts to a cheaper rate. It is also a time when many review their pensions, savings, and investments. The New Year is also a time when many homeowners start to think about home improvements over the coming year.
Many retired homeowners are using the equity in their home to carry out home improvements whether that be putting in a new kitchen or bathroom, replacing windows and doors, or upgrading their car. In 2017 the equity release market hit £3 billion a rise of 40% on previous years. According to Key Retirement, a leading advisor of equity release plans over £8.2 million was released to retired homeowners per day in 2017 with the average sum borrowed £77,380.
Whilst 64% of homeowners use equity release to carry out home improvements, 23% use it to repay their existing mortgages and clear debts and more than a fifth release equity to assist relatives. There has also been an increase in pensioners using equity release as a means of funding long-term care.
Like any financial product, it is very important independent financial advice is taken to ensure equity release is the right choice for you. Whilst any cash lump sum released will be tax free, your ability to claim means tested benefits may be affected. In addition, because the amount borrowed together with the rolled up interest will be repayable either on death, or if you leave the property because you require full-time nursing care, this will result in a reduced inheritance for your beneficiaries under the terms of your Will.
The Wills, Life Planning and Probate team at Fisher Jones Greenwood are able to advise you on all the legal aspects of equity release on a fixed fee basis. For further information please contact us on [email protected]