house prices

A new way to invest in property: the rise of equity release

Using equity release to access the cash tied up in your home is a popular way for over-55s to fund retirement, but new evidence suggests it is increasingly being used to buy more houses.

There has been a significant rise in the number of people aged over 55 taking equity out of their existing homes in order to invest in another property, according to new research from Retirement Advantage.

A reported 10.3% of people who used an equity release product between April and the end of June this year did so in order to make a further property investment, the figures revealed, up from just 6.6% who did the same thing a year ago, which is a rise of more than 56%.

Making new property purchases

Equity release – which can involve the release of a lump sum, several smaller amounts or a combination of both using the value of an existing property – has historically been used as a means of freeing up money for retirement. It is only available to over-55s who have a certain amount of equity in their homes, and many have been able to benefit from the drawdown after seeing strong capital appreciation in their homes over the years.

The money taken out can be spent on anything, from home improvements to new cars, holidays or gifts to relatives, but the rise in those putting it towards property investment shows a trend towards using property wealth for longer-term gains.

Alice Watson, head of product and marketing at Retirement Advantage Equity Release, commented: “We’ve seen plenty of headlines suggesting the property market has slowed in recent months. Not for over-55s, it seems. For this cohort, our figures suggest they are increasingly keen to make property purchases.”

Releasing the wealth – but not downsizing

While around three quarters of the country’s housing wealth is owned by over-50s, accounting for £2.8trn of housing equity, it isn’t surprising that this is a popular strategy for many older homeowners who still recognise the value in bricks and mortar.

Contrary to perceptions, only one in five older people are willing to consider downsizing their property, according to research, preferring instead to use their money towards long-term investment and homeownership.

Watson added: “Using existing property wealth in this way also offers further evidence that equity release customers today are proactively using the products to make major financial decisions. This reinforces the rapid maturity across this booming sector.”

Self-certified Sophisticated Investor

Please read

I declare that I am a self-certified sophisticated investor for the purposes of the restriction on promotion of non-mainstream pooled investments. I understand that this means:

I am a self-certified sophisticated investor because at least one of the following applies:

I accept that the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested. I am aware that it is open to me seek advice from someone who specialises in advising on non-mainstream pooled investments.

High Net Worth Investor

Please read

I make this statement so that I can receive promotional communications which are exempt from the restriction on promotion of non-mainstream pooled investments. The exemption relates to certified high net worth investors and I declare that I qualify as such because at least one of the following applies to me:

aerial-view-uk-houses

緊貼市場趨勢

立即登記搶先獲得最新項目及獨家物業投資機會。

我們會定期發送電子通訊,介紹最適合您的全新發布項目及獨家優惠。 我們受到超過 30,000 名活躍買家的信任,不斷更新最新英國物業市場資訊。

  • 最新發展項目及獨家優惠
  • 樓市走勢專業分析
  • 物業市場成交數據
  • 項目建築進度定期更新
UK holiday let

最新最快英國樓市新聞。

追蹤我們最新樓市觀點,爲您提供前瞻性的建議和分析。

自 2005 年成立以來,我們是英國地產市場權威,提供前瞻性的建議和分析。我們的英國物業資訊獲得 Apple News 及 Google News 授權發佈。

  • 英國樓市趨勢
  • 按揭申請攻略
  • 業主放租須知
  • 物業指南及投資建議

請即聯絡

立即聯絡我們英國物業專家查詢更多:

 

+852 6699 9008

辦公時間 9am-6pm