Although the government has pledged to build more affordable homes for first time buyers, older people who may be considering downsizing have very little in the way of options. The UK has a lack of affordable suitable homes, with a huge impact on those approaching retirement and the elderly.
Philip Hammond, the Chancellor, committed £3.7bn in the Autumn statement to build 100,000 new homes in the UK. However, although this was good news for first time buyers, it will have little impact on those who need to downsize their home. As large numbers of people approaching retirement realise that their pension won’t be sufficient later in life, they may be considering the largest asset they have, their home, to supplement their income during retirement.
Equity release is a popular option, so that older people can fund their retirement or even help their children to buy their first home. There are various types of equity release, and a CeMAP qualified mortgage adviser may be able to help select the most suitable type.
A lifetime mortgage is one of the most popular, and is a loan which is secured against the property. A cash lump sum is provided, tax free, but no monthly payments are made. Once the home is sold, the loan plus interest is repayable.
Making the decision to use the equity in your home could have a long-term impact on your circumstances, so it is important to discuss with a qualified adviser who has taken a CeMAP training course.
