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CML: Equity release take-up could be higher
17 March 2008 12:00
The number of people releasing equity from their homes rose last year, according to a new Council of mortgage lenders (CML) report, but this growth could yet be faster.
While the total value of equity release products sold in 2007 was up by 3.9 per cent on the year before at £1.26 million, the CML's study noted that the market's fundamentals suggest that its growth should be far greater than it currently is.
It argued that although homeowners generally recognise and are willing to use the value held in their properties, many prefer to achieve this through simply selling up rather than utilising the more indirect solution of equity release.
Yet the report also noted a greater readiness among younger people to release equity during their lifetimes, while analysis of more mature markets elsewhere indicated that they finally began to show higher growth once younger households entered them.
The study's author, independent consultant Peter Williams, argued that equity release would grow far more quickly if providers were more creative in enhancing its availability and attractiveness and if the government also played a more prominent role on this issue.
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