One of the most talked about and potentially viable alternatives to equity release is to take a bold step and downsize to a smaller property. The Office of Fair Trading recently covered downsizing as an alternative to a selling a house and renting it back. The OFT stated that:
‘Relocation may also be costly and sale on the open market may take a considerable period of time, particularly in the current climate.’
The leading equity release industry body, SHIP, have seen an increase in new customers looking to release equity in their property compared to this Quarter last year. Some attribute this to the recent rising house prices along with the shortfall that some see in their retirement allocations.
The fact that drawdown mortgages are now reported to take up 51% of the market suggests equity release is being used more as a scheduled supplement rather than for lump sum purchases.
Perhaps the increase is down to more government backing in the equity release industry after Baroness Hollis’ welcome intervention at the House of Lords: