Equity release could be more viable than downsizing
At a time when everyone seems to be searching for ways to make their money go further, equity release is appearing a practical option as downsizing no longer appears to suit people’s situations.Research from Aviva has suggested downsizing can be impracticable for many over 55s with just 16 per cent of those surveyed saying they would or could be able to move to a smaller home.
For many downsizing was the most obvious solution for people looking to capitalise on the value of their property. However with the housing market in a slump and associated moving costs, downsizing is not as financially rewarding as it once was.
But it not just the potential financial detriment which sees downsizing out of favour; there is also the physical restrictions of a smaller property.
In the current climate where the average first time buyer is 38, Aviva observed a growing trend of offspring flying the nest much later in life. Retirement Director at Aviva, Clive Bolton, comments:
“It seems family pressures and needing more space in the home for individual relaxation are causing the majority of retirees to stay in the family home at retirement, rather than considering a move to a smaller house.”¹
It is these reasons where equity release can provide an appropriate alternative.
Equity release allows the homeowners to release funds from their property whilst retaining the right to live there for as long as they choose.
“Equity release is a useful option for many, allowing people to stay in their home, at the same time as turning potentially dormant capital into their property into cash.”¹
To discuss the legal nature and implications of an equity release policy, contact the GWLifetime team on 0845 373 3737 or complete our online enquiry form.
¹Mortgage Solutions (Dec 2011)
Content correct at time of publication