Money: 2012 - New Equity Release Market?
Equity release means many things to many different people, to some by releasing equity from their house enables them to live the life in retirement that they wish to live. To others quite simply, equity release is the last thing that they would ever want to do. Visit TheRetirementCentre.com Equity Release section to find out more about the specifics of Equity Release.
I don’t believe that Equity Release is right for everyone – (if your are considering Equity Release seek advice from a financial adviser). However, I do genuinely believe that it is right for some people and doesn’t deserve the negative press that it has received in the past as these are often based on information on products that haven’t been around for a least 10 years.
Equity Release has been regulated by the Financial Services Authority since 2003 nearly 10 years and in this time the providers of Equity Release have done a lot of work to create products that meet a wide range of customer needs, from guaranteed inheritance protection to no early repayment charges and even higher borrowing amounts if you are not in your finest state of health, the market really has moved on and continues to move on with speculation that a number of providers are looking at how care fee’s can be funded using Equity Release.
Safe Home Income Plans (SHIP)
Although perhaps an unusual acronym for the Trade Body of the Equity Release industry it is has worked extremely hard with the industry to improve standards and members of SHIP need to abide to a stringent code of conduct and offer customers features and guarantees that go above and beyond those required by the regulator, such as the introduction of the No Negative Equity Guarantee. To find out more about view the SHIP website.
The trade body has recently announced that they are expanding the membership to include financial advisers, solicitors and other interested parties. The Director General, Andrea Rozario said:
“We will no longer simply be the voice of equity release providers, working with the rest of the sector, but we will be the voice of the entire sector, bringing together providers, solicitors, advisers and all key stakeholders as members of a united industry body which fully represents the whole of the industry and puts the needs of the customer first.
“The Ship standards which have, over the past 20 years, helped to redefine the equity release market by giving consumers the confidence they need in providers and the peace of mind that safeguards offer, will be available to all parts of the sector.”
Equity Release – yes it really can be life changing
I am aware of situations where Equity release has been used for a whole range of purposes. One case that I remember in particular was a case where a widow was living in an old detached house. Sadly since her husband had passed away her disposable income was such that instead of turning the heating on in even the bitterest of winters, she used to go down to her local charity shop and buy second hand books to burn just so she could survive the cold.
After an adviser had spoken to her and explored her range of options it was identified that Equity Release was indeed the right thing to do. As a result of Equity Release her life improved dramatically she renovated the house, including a new bathroom and kitchen as well as a full decoration, new double glazing and insulation. You only imagine how this changed her life from one that was in all but over to a newly reinvigorated out going lively individual.
There are also cases were using Equity Release allows people to realise their dreams for example I am familiar with a case where an individual has released a substantial amount of equity to finance the purchase of a 60 foot yacht to sail round the world on. It has to be said that this is not a common reason for using equity release plans, so here is a list of the top 5 uses for equity release.
5 most common uses for Equity Release
- Home renovation
- Pay off existing debt that requires a monthly repayment i.e. Mortgage, Loan, Credit cards
- Gifts for family i.e. funding deposit for a house
- Purchase of a car
Equity Release Market changes so far in 2012
- Both LV and Just Retirement have decreased their interest rates by 0.1%.
- Aviva has announced it will no longer be selling Home Reversion plans so they can concentrate on Lifetime mortgages.
2012 looks like it is going to be a year of change, development and growth for the UK Equity Release market and I for one am very excited about the possibilities of what may happen in the market. If you are considering Equity Release or would like to find out more visit TheRetirementSection.com or call 0800 316 8587.