The equity release industry reached a record high in 2021, with over £4bn in equity being unlocked by older homeowners in the UK. The question on everyone’s mind is: will the industry see further growth in 2022?
Equity release specialist John Lawson from SovereignBoss offers expert predictions on the equity release industry’s growth in 2022.
What Is Equity Release?
In case you’re unaware, equity release is a leading UK financial product that’s designed for older homeowners to gain access to the cash tied into their property, instead of leaving the full amount as an inheritance.
Once unlocking equity, the homeowner is permitted to continue living on the property for a minimum of 6 months a year until they pass away. What’s fantastic about equity release products is that the homeowner is under no obligation to repay any of the loan amount or interest in their lifetime. Instead, the equity is repaid when the last borrower dies or requires a long-term care facility.
If leaving your loved ones an inheritance is important to you, you can get the best of both worlds. With inheritance protection, you can set aside a portion of your loan to be left to your heirs.
What Impacts Equity Release Industry Growth?
While industry growth means further competition for lenders, it’s great news for the homeowner. Equity release lenders must now offer competitive deals to stay top of their game.
With massive industry expansion seen over the past few years, equity release companies are seen to be offering voluntary repayment options, lower interest rates, free advice, free valuations, and zero completion fees.
Legal & General offering equity release is an example of a firm making an effort to provide flexibility for its over 89,000 customers. Their plans include cashback offers, a free valuation, and no completion fee.
Your whole market financial adviser will guide you towards finding the best possible equity release deal to suit your needs.
Will 2022 See an Upwards Trend? What the Expert Has to Say
Like 80% of UK-based financial advisers, at SovereignBoss, we believe that there will be further industry growth as we continue into 2022.
“The equity release industry offers older homeowners the chance to be financially free, but still live at home. This revolutionary financial product is taking the retirement industry by storm because homeowners have the freedom to select from a wide range of products and custom-tailored packages to cater to the individual. While the industry carries a history of corruption, things are vastly different since the implementation of the equity release council in 2022. These days, equity release is perfectly safe under the protection of the Equity Release Council.” – John Lawson
Is Equity Release Industry Growth a Good Thing?
Yes, equity release industry growth is a great thing for the consumer. With increased popularity, equity release interest rates have seen record lows. In 2021, rates hit an all-time low, with some consumers achieving as little as 2.3%.
What’s brilliant about low interest rates is that they’re fixed for life. In other words, once your rates are set, the only way you can reduce or increase them is by switching plans.
While equity release interest rates are likely to remain stable for now, lower rates may be seen in the next few years, as the industry continues to grow in popularity.
While many industries have tanked during the COVID-19 pandemic, equity release has triumphed. Despite small losses during the hard lockdown, lenders have adapted to meet the needs of their clients.
As older homeowners are finding it harder and harder to afford retirement in these tough economic conditions, equity release offers the opportunity to alleviate much financial stress. Visit SovereignBoss to read more about what John Lawson says about Equity Release and the future of these flexible products.