Recent reports highlight an increased demand for equity release plans. This demand has been building for some time in terms of enquiries, these enquiries are now turning to applications and completions. What is interesting regarding the increase is the reason for the demand. There are as always in these circumstances a variety of reasons, however we are finding more people effecting these plans due to financial problems as opposed to aspirational purchases or luxury goods.
There are two main types of financial difficulties which applicants are encountering. There are those with large outstanding secured and unsecured debt, a relatively new phenomenon of this generation, those reaching retirement or close to retirement with not enough income to service their debt. Some of this group have debt management arrangements that they would like to clear, others have not yet reached that stage and are looking to purely clear all outstanding debt. The problem with the second group is that they often do not have enough equity in the property to effect an equity release plan that clears all debt. Another group are those who are in retirement and have exhausted all savings and now find that their income from pensions simply does not meet their day to day expenses. They have no “rainy day” money left and are worried not only about the normal costs involved in running a house but if there are any repairs required they simply do not have the funds, not to mention small treats or holidays. In truth their standard of living is very poor.
Is Equity Release Acceptable?
Equity release is becoming increasingly more acceptable to this group of people to use the equity in their property to help them to live a life which rises above the edge of poverty. The situation becomes ever more exceptable when you have scenarios in which a pensioner living on purely an old aged pension has a large council tax bill each month on a property worth hundreds of thousands of pounds which is unencumbered. More and more people are realising that this scenario makes no sense to them personally and are using the property to fund a life which takes them away from the poverty line
Related Posts :
