Tuesday 6th May 2008
Safe Home Income Plans (SHIP), the professional body for equity release practitioners, has stressed that such a scheme is still a possibility for many Britons.
In spite of figures showing the typical property is now falling in value, a spokesperson asserts that equity release is still available as an option for homeowners.
Andrea Rozario, director general of SHIP, explains: "Equity release has a vital role to play in many peoples long-term financial planning, regardless of whether property prices do fall for a period of time."
The organisation adds that the long-term nature of equity release plans in fact makes them more resilient to short-term volatility.
SHIP points out that anyone who provides equity release under its membership must offer guarantees which could provide peace of mind to homeowners.
One of these is the promise that the owner of a house is entitled to reside there either until death or until they enter long-term residential care.
A further protection ensures that the amount owed tracks any negative shifts in a propertys price to guarantee that total repayments do not exceed the value of the home.
Ms Rozario continues: "The current situation in the property market does not mean the door is closing on equity release - far from it.
"Falling property values do however make the very high standards that SHIP members must adhere to all the more important to consumers."
SHIP recently reported that, despite reduced lending figures in the first quarter of 2008, demand for equity release plans remains strong and is likely to recover in the coming months.
Concerns arising from the credit crunch were given as a likely causation factor in creating the short-term reduction in plans being approved.
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