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Equity release ‘a sign of hard times’
Struggling homeowners have turned to equity release just to cope with the increased cost of living, according to an equity release adviser.
Data from Responsible Equity Release showed three-quarters of its clients used some of the equity in their homes to help themselves or their families cope with the economic crisis.
Steve Wilkie, managing director of Responsible Equity Release, said 36 per cent of customers used their equity to repay a mortgage, up 31 per cent on 2010.
He said 23 per cent of customers used their equity to help struggling family members, whether to pay down their debts, support their incomes or provide the deposit required to buy a home. Another 16 per cent of customers used their equity to create a cash surplus for the regular payment of soaring utility bills.
Mr Wilkie said: “In such a dire economic climate, it will come as no surprise that there has been a sharp rise in the number of people turning to the equity in their homes to help themselves and their families pull through.
“The toxic combination of high debts, high inflation and high unemployment has stretched many people’s incomes to breaking point and the money tied up in our houses is providing a degree of relief.”
While five or six years ago, Mr Wilkie said, the majority of people releasing equity did so to improve the quality of their retirement, these days a growing number of equity release plans were being used simply to make ends meet.
