What is Equity Release

The value of residential property has increased significantly over the past twenty years. As a consequence, there are many people who find themselves in the position of being “asset rich” but “cash poor” – owning a valuable property, with no mortgage, but living on a relatively low level of income. Equity release schemes offer the opportunity for homeowners to raise extra income or a cash lump sum (or both) by giving them access to the capital value “tied up” in their home without having to sell their home outright or move out.

History

Equity release schemes have been around for more than 25 years (either as lifetime mortgages or home reversion schemes) but some consumers have been wary of them in the past. Now, however, lifetime mortgages and home reversion schemes are regulated by the Financial Services Authority (FSA) and almost all lifetime mortgage providers and reversion companies are members of Safe Home Income Plans (SHIP).