Improvements top list of equity release in survey
The most common reason why householders take out a home reversion plan is not to supplement a pension but to carry out home improvements, a survey by Bridgewater Equity Release has revealed.
It found that 43 per cent of clients used the plans to provide money to carry out home improvements, while 24 per cent used the cash to pay off a mortgage.
Another 21 per cent used it to fund travelling and 15 per cent used it for buying a car.
Peter Welch, head of sales and distribution for Bridgewater, said: “There are a whole manner of ways customers are using their accessed equity to fund smaller purchases, improvements to their homes or to have funds available should an emergency arise.
“Flexibility is absolutely key here and this data goes some way to proving that releasing a smaller amount of equity is compatible with funding lifestyle choices.
“Historically, where customers have been looking to release less than the maximum amount, advisers have tended to recommend a lifetime mortgage.”
However he said Bridgewater believed partial reversions should also be considered for this type of customer as they can provide certainty and security.
Gerald Potter, adviser for Norfolk-based ARW Wealth Managers, said: “I have found there is a psychological hurdle people have to get over, namely that they think they are selling their house.”