In his latest blog, Richard Carr looks at the increasing role that the UK property market is playing in retirement planning.
Stored wealth used in retirements
Richard Carr has gained planning permission on property for himself and his clients throughout his career in the industry. He is currently employed by Jacob Carr Homes Ltd as a Commercial and Residential Development Consultant.
The latest industry figures from the Equity Release Council (ERC) highlight the surge in the number of retirees using the wealth stored in their home to fund their retirement.
Lending passes £1 billion in 2014
Stored equity is becoming vital in allowing retirees to make the most out of their remaining years, whilst also given them money to spend on family. In the first nine months of 2014, the equity release lending passed £1 billion and reached a record quarterly amount in the third quarter of £375.5 million.
The figures are staggering and a large increase on previous years. The £1.02 billion total for the first nine months of 2014 is more than the entire year’s lending totals for 2009 and 2012 and is already 95% of the total value of the market in 2013.
The ERC believes that the surge could be down to the appeal of large initial sums that allow customers to pay off lingering debts, such as outstanding mortgages, or to fund one-off expenses.
Equity release is an invaluable financial planning solution
“The latest lending figures show equity release is proving an invaluable financial planning solution for over 55s approaching retirement as pension savings fail to cover rising costs. We’ve seen record breaking growth this quarter as the value of lending exceeds all previous benchmarks,” said Nigel Waterson, Chairman of the Equity Release Council.
“Rising house prices also mean that customers have a growing pool of equity at their disposal and can still keep a large proportion of the value of their house intact. Equity release can offer a large and much needed boost to people’s finances, providing comfort and stability throughout retirement,” he explained.
Further evidence that property and capital taxes are unfair
In Richard Carr’s opinion, the latest figures from the ERC prove that property and capital taxes are unfair and counterproductive.
People who have been responsible in their lives and worked hard to pay off mortgages so that they can release equity in retirement to help children or to enjoy themselves are under what would appear to be the new socialist thought process, and will be put off storing value in their bricks and mortar.