Rapid CGT rise good for equity release

The government's decision to raise Capital Gains Tax (CGT) immediately will act as a boost for the equity release market, according to an expert.

James Hyman, from property consultants Cluttons, believes that the rapid rise in CGT means that people haven't had chance to flood the market with their second homes.

This means that house prices shouldn't plummet due to over-supply.

He remarked that the move could well mean that supply will decrease, as investors and second homeowners hold onto their properties for longer.

This should see house prices rise, which means more money can be extracted via an equity release scheme.

He also points out that now that the budget is out of the way, there could be a "surge in demand" of people looking for homes, which would raise property prices still further.

This would be especially good news for those with a drawdown lifetime mortgage, as the instalments they receive could increase in value as house prices go up.

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