Equity release available on a wider range of properties than ever before
9 October 2019
Supply and demand in the equity release market
If you ever studied economics, you’ll understand the principles of supply and demand: as demand goes up, so more suppliers step into the market. This is exactly what is happening in the equity release sector: as more people become aware that the equity in their homes could provide part of the solution to their retirement finances, so more lenders are moving into the market.
Increase in supply is not simply a matter of the number of lenders offering equity release, it’s also measured in terms of the range of products available. This is going up all the time; the number of products available that met the Equity Release Council’s standards doubled in 2018 to 211, according to its Spring 2019 report.
Wider equity release product offering
One of the results of the interplay of supply and demand is that the criteria against which lenders may be willing to lend money against home equity is widening. Some lenders are now willing to lend against properties which previously would have been debarred from home reversion plans or lifetime mortgages.
It’s now possible to find equity release products for the following types of property:
- Houses with a home-based business
- Houses with land and buildings in personal agricultural or equestrian use, including estates and country houses with some personal commercial use
- Homes where one or two rooms are used for bed & breakfast (including Airbnb), or where a self-contained part is used for holiday lettings or let out to a tenant
- Thatched properties
- Listed buildings including grade I and II* and many properties constructed using historic building techniques
- Modern methods of construction including Eco homes
- Studio or basement flats and ex-local authority properties
Time to think again about equity release
“There are more and more equity release products available all the time, which is fantastic news for those aged 55 and over as it means greater flexibility about realising their retirement dreams,” commented Jan Johnson, director of 55+ Equity Release. “If you’ve explored equity release in the past and been told your property doesn’t meet lending criteria, it’s worth revisiting it with an experienced, honest adviser who really knows the market and can see if there is now a product available that matches your property and needs.”
Increased demand for equity release is leading to more innovative products, a trend we expect to see continue.