Slight House Price Fall Won’t Affect Equity Release Market
The Royal Institute of Chartered Surveyors (Rics) has reported marginal decreases in house prices for the first time since July 2009. However, potential equity release customers shouldn’t be deterred by this news, as they could still enjoy a greater value from the percentage they release when compared to this time a year ago.
Earlier in the month, the Land Registry reported that house prices were at the same level as 2006 which meant that homeowners could get a greater percentage from the amount of equity they released. This growth over the past 12 months should ensure that, despite these dips in house prices, homeowners can still benefit from equity release.
The Housing Market Stabilising
The Rics survey was based on 242 surveyors across the UK with 64% reporting that they hadn’t noticed any change in local house price levels. However, 24% were aware of a marginal decrease but this was tempered slightly by 11% who saw rises.
The overall picture is one of stability in the housing market though, with the encouraging growth seen towards the end of 2009 and in early 2010 coming to a halt. However, the position of the housing market as it is would suggest that homeowners considering equity release would still be able to release more value from the percentage they took than if they took a scheme a year ago.
Equity release schemes have the potential to unlock a tax-free lump sum from the value of a home to be spent on whatever the policyholder wishes to spend it on.
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