Mis-sold Equity Release. Is equity release a viable option to help offspring get onto the property ladder?
New research commissioned by financial services provider One Family has found 1.8 million British parents over the age of 50 are considering or have already taken out equity release to assist their children onto the UK property ladder.
Further, it found they are willing to release as much as £52,000 from their homes to circumvent the problems first-time homebuyers are facing.
This study comes amid concerns over the rising costs of rent as well as essential living costs. About 41% of parents with children who are renting have expressed that the rising costs have made it difficult for their children to save for a mortgage deposit.
Rudy Khaitan, managing partner of later-life lending specialist Senior Capital agrees that equity release can be a solution that can be tax-free and that can also address the financial needs of parents who want to help their children in purchasing their own homes.
“In today's society, many over 55s find themselves in a paradoxical situation - they are 'asset-rich' due to the value of their homes, yet 'cash-poor' with limited disposable income,” said Khaitan.
“As the cost of living continues to rise, many find themselves struggling to make ends meet, despite owning valuable properties. Equity release offers a solution to this dilemma by enabling homeowners to tap into the wealth tied up in their homes.
It can provide a much-needed cash injection to enhance their quality of life, cover unexpected expenses, or even help their families. Equity release is more than just a financial transaction; it's a means of bridging the gap between asset wealth and living standards, ensuring that those who have worked their whole lives to build their assets can finally reap the benefits of their hard work."
Lending in the UK reached a total of £699 million in Q1 in 2023, according to the Equity Release Council. This has been attributed to the fact that it has become a means for people to prepare for their future, helping them achieve financial stability in a challenging environment with persisting inflation.
Equity release schemes can create a viable pathway that homeowners can consider in managing their assets in the midst of turbulent economic times, advocates suggest. It provides not only innovative financial solutions but also an opportunity for pension funds to direct several allocations to reduce investment risks.
The equity release market in the UK has grown by 100% in the last five years, and it is now seeing record activity as consumers seek alternatives in a challenging environment of high interest rates and high inflation.
NOTE: We claim no right or title to this article which appears in Mpamag dot com. Author acknowledged as Jonalyn Cueto.
If you or a loved one has been the victim of mis-sold equity release contact Claimline Legal today on 0800 779 7457 or go to our website at www.missoldequityrelease.co.uk
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