Mortgages  

Lack of enthusiasm holds equity release back

The report’s fifth chapter, Housing Finance, found that home-ownership has been on a “steady upward” trend over the years, generating an expanding pool of consumers aged 65 and over who could turn to equity release as a source of income.

However, Mr Cazalet argued that enthusiasm for housing as an investment has not yet translated into more appetite for equity release.

He said: “The sector still appears to face headwinds with regard to consumer attitudes.

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“There is not so much enthusiasm for financial decumulation in retirement involving borrowing against your own home through equity release.”

The report found that equity release sales had recovered to £926m by 2012, when the average amount being released stood at £52,000.

Mr Cazalet said this figure, the highest since 1998, reflected that households were carrying more mortgage and credit card debt into retirement and sought solutions for products such as interest-only mortgages.

Tim Sutcliffe, managing director of Shropshire-based Pi Financial, said: “The problem is there are relatively few providers of equity release plans, and the providers that are in the market need to be less greedy with their terms.”