equity-release-expert.co.uk

Economic woes forcing equity release ?

Are the current economic conditions forcing pensioners into equity release ?

Pensioners have been particularly hard hit by the double whammy of low interest on savings coupled with high and rising costs for basic necessities such as food, electricity, heating and the reduction is budget for care needs. This is backed up be research from Prudential, which finds that the cost of living is rising almost 50% faster for pensioners than the current rate of inflation.

The average pensioner apparently has around £20,000.00 of savings but need this for simple day to day living costs.

New equity release product on market

It is always important to think carefully before raising funds through an equity release scheme due to the fairly prohibitive interest rates applied to these types of loans.

However, if you are over 60 and have a need to access funds, a new product on the market may be worth lo9oking at.

Insurer Partnership has made available a new equity release scheme which involves some reasonably straightforward medical questions being asked but which, depending on the results of those questions, and underlying health conditions, may allow a person with possibly worse health problems (and therefore life expectancy) to withdraw a higher proportion of equity from the property.

Th is scheme also has the potential advantage that interest on the loan does not need to be paid monthly but can be rolled up. Again, there are definite pro’s and con’s to this which should be carefully considered.

In terms of figures, the scheme might allow a 60 year old person with a potentially significant condition such as diabetes to borrow an additional 5-6% of the equity over and above the usual amounts of around 20% of the property value.

Improved environment for buy to let landlords

Some good news at last for landlords, according to data released by Countrywide, one of the largest letting agencies in the UK with1,300 offices nationwide.

They advise that in the first quarter of this year, it is taking, on average,  13 days to let a property whereas in the corresponding quarter of 2010, it took, on average 17 days.

In addition, there has been a  51% increase in demand for property from tenants at the start of this year start compared to 46% at the beginning of last year.

The data also suggests a general  shortfall in available rented property, with an average five tenants competing for each property, especially in London, where house prices and mortgage unavailability are undoubtedly fuelling the rental market.

Al in all, good news for buy-to-let investors in terms of income steam, especially with interest rates remaining at historic lows. The position on capital values and appreciation is another matter entirely however.

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