High street lenders to enter to equity release market?
With the interest-only time bomb ticking ever louder, it is rumoured high street lenders could be considering entering the equity release market.
The rumour mill has been on overdrive ever since the Financial Conduct Authority’s (FCA) review into the interest-only mortgage sector and the acknowledgement from lenders to find a way to help customer’s unable to meet their looming capital repayments.
Allowing a homeowner to release some of the funds tied up in their property, equity release could be one possible solution.
However high street giant Barclays has since quashed speculation about any imminent entrance, a spokesman issuing the following statement:
“There is certainly a place in the market for equity release and it is likely that we will see these products increase in coming years. However Barclays has no current plans to enter this market.”
But as we saw with the football transfer window, surprise moves can still happen.
Richard Espley, Head of Equity Release at Goldsmith Williams, comments:
“Interest-only homeowners face one of the toughest challenges in the property market, a situation exacerbated by the prospect of having to sell their beloved family home in order to meet the repayment.
“With so many older homeowners affected by this it would fantastic for high street lenders to join the equity release market and help find solutions for people in and approaching retirement with an outstanding mortgage.
“Allowing homeowners to release funds from their property whilst retaining the right to live there, equity release could be a viable way for homeowners to address their interest-only nightmare.”
Content correct at time of publication