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SHIP: Equity release remains safe
7 May 2008 12:22
Britons can still rely on equity release despite recent house price falls, according to the sector's trade body, which expects this option to become central to retirement planning.
Latest indexes by Nationwide and Halifax show that house prices fell by around one per cent year-on-year last month, while recent reports have warned that a major correction could leave many borrowers with mortgages worth more than the value of their homes.
In response, Safer Home Income Plans (SHIP) has now moved to quell any concern over equity release by reiterating that its members are required to provide their customers with guarantees of no negative equity and of security of tenure.
It also pointed out that equity release is a long-term solution and therefore any short-term falls in house prices are less relevant to plan holders, with the overall movement in property values having always been upwards historically.
SHIP director general Andrea Rozario insisted that the recent dip in pension investment and rise in spending on property means that equity release has a vital role to play in people's long-term financial plans, regardless of whether house prices now fall for a spell.
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