Speaking at the Mortgage Business Expo in Manchester, Jonathan Cornell, technical director at Hamptons, said the knock-on effect of people releasing equity from their property would allow pensioners to remain in their larger family homes rather than downsizing, therefore propping up prices.
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Cornell stated that, with the value of pensions and investments falling and the pension gap that currently exists, increasing numbers of people will look to release equity from their properties to supplement their retirement income.
He added that it was surprising how slow equity release had been to take off and grow, but said: “Lenders should be more ready to lend to those over 65 years old and be more supportive of them. Why should consumers be forced to take an equity release mortgage if they can afford to pay for a traditional mortgage?”
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Dean Mirfin, business development manager for Key Retirement Solutions, commented: “The reality is that not many people downsize anyway. If millions were doing so and the volume was there, it would be an issue, but I think it’s a bit of a red herring. Instead, increasing numbers are releasing money to help their children get onto the ladder.
“I definitely think lenders ought to give more support to people over 65, but a lot of people don’t have the income or want to service traditional lending and you start to get into the arena of debt in retirement.”
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